Whether it is your first or even second property, home buyers never prepare for certain things. Namely, the speed in which decisions must be made, the unknown mechanics and structural components of a home, and the financial implications of buying a property will cause stress to home buyers.
Expecting The Unexpected
Usually, the most unexpected and biggest surprise to homeowners when purchasing a house is the rapid timeline in which decisions are required. This can, and very often does, result in stress. From my vantage point as a realtor, the reason for this stress relates back to knowledge and preparation in the home buying process, and confidence in what kind of property you are looking for.
For example, certainty and comfort in neighbourhoods that suit your future plans often leads to quick decision-making with buyers. This can stem from time spent looking in various areas, deciding to buy in the area you already live in, or even moving to a familiar geographic location. Intimate knowledge and clear future plans leads to confidence when you need to jump on a property. If there is indecision in this area, it will be much harder to make fast and confident decisions.
Once you’re locked in a location, digesting the actuality of buying a home and all the variables that come with it, comes next. Outside of considering geographic and lifestyle factors, the mechanics of a home may not be discussed or even realized until you’ve had an inspection. It is extremely disappointing when an inspector finds cracks in a foundation, mould in an attic, moisture in walls, or roots in a sewer line, all after a buyer believed the sale would go through. Therefore, it’s important to get an understanding of the components of a home and how much work you can realistically afford to take on (DIY or professional renovations/repair).
When Should You Walk Away From A Home Buy?
Depending on the findings from the home inspection, there are issues that warrant driving away. This is the point where you should consider your inspection money well spent. However, shortcomings from an inspection present an opportunity to reduce the purchase price before finalizing the deal, while acting as a future guideline for required maintenance.
Water, structure, financial! If indications of leaks in a building are present, whether, from the roof, attic, pipes, or foundation, the damage will likely be costly to repair. This is especially true with wood because when it starts to rot, you’re in for a big job. You want to be certain the house has ’good bones’. You can renovate all you want, but if you’re investing money on a foundation or floor joists that are not sound, you are wasting money. You need to be certain that the cost to renovate and repair the structure won’t exceed the amount the property will return. Further, if things start to add up from what you initially thought was reasonable for repairs, the same financial discussion holds; if the total cost of repairs exceeds your threshold, or prevents you from enjoying your space, you should keep the search alive and walk away.
A House Is The Biggest Investment You’ll Ever Make!
Two unknowns exist when deciding whether or not you should buy a house. The first question all home buyers must ask is how much can I afford. Secondly, understanding when to rent or when to buy, or how long to hold onto a property can be a difficult question to answer.
The average single-family detached home in Halifax costs approximately $290,000. A house’s down payment typically lies between 5-20% with closing costs roughly amounting to 3% of the purchase price. So, the initial financial output for a house, on average, is between $23,000 and $67,000, depending on what percentage down payment you decide on. On the flip side, selling the same property through a realtor requires (approximately) a 5% commission, a lawyer for the transaction, and years of maintenance and taxes on the property. Ultimately, you should tally up your expected monthly expenses plus closing costs on buying/selling a property and compare that total to how much you would spend on rent over the same timeline.
So before you get out there looking for your next house, think about your five-year plan, where you like to spend the majority of your time, what your tolerance is for regular maintenance, and be comfortable with how much you can afford to pay for your home. Check back in with us to see how much you should be saving on a monthly basis for on-going maintenance.