Moving is a stressful process in and of itself, to be sure. Doubts and fears regarding the price you’re paying for your new home can make it far worse. One of the best things you can do for yourself when looking for your new home is to give yourself the ability to make the purchase in confidence. If you know you’re getting a good deal (or, at least, the best possible deal you can get), it can take a serious load off your shoulders and free your mind to deal with everything else. The question is: how do you make a purchase with confidence? After all, a new home is likely going to be one of the biggest purchases you ever make in your life.
Take a look at your budget and see just how much you can spend on a mortgage without having to lower other expenses. Just because you qualify for a $300k home loan doesn’t necessarily mean you can afford a $300k home. If you find yourself in a position where your monthly mortgage payments are going to lower the budget for things like food, entertainment, car-related costs, etc., then you may need to rethink things.
Get info on the area
So, you’ve found a home that fits comfortably within your budget – good job! Your next step will be to get information on the area the home is in. Things like the school district, crime rates, accessibility to freeways, nightlife, commercial areas, etc. Even if the info regarding the area doesn’t all apply to you, knowing it is still important. Regardless of whether or not you plan to have children, a home in a good school district will often have a higher resale value than one that isn’t.
Get an appraisal
Most lenders will require an appraisal anyway, but even if they don’t, make sure you get one. The appraiser will be able to to tell you the home’s worth and you can then compare that to the seller’s asking price.
Compare similar homes’ selling prices
Most neighborhoods will have homes that have been bought and sold recently, so compare the price of the home you’re interested in to recently sold homes in the area. If the home you’re looking at is significantly lower, there’s probably a good reason for that. Ask the seller if there are any issues with it. If it’s significantly higher, there’s probably a reason for that, too. Make sure you find out the reason(s) if you find yourself in either of these situations.