As a real estate professional, I have seen homebuyers make the same mistakes repeatedly. Buying a home is not just about buying a home, it’s about making the best, most equitable decision over time to net the best return on your largest investment. Here are the top xx tips to selecting a home that will keep you happy for a long time to come.
1) Do not choose a home based on proximity to work.
Whether economic climates are healthy or poor, choosing a house based on its distance to accommodate your daily commute is never a good idea. No one has a crystal ball; you do not know if you will be laid off, fired, or if you will simply find another opportunity more in line with your career goals. Because things can change in a heartbeat, selecting a home based on proximity to work will result in you becoming a serial mover, not allowing you enough time in one spot to build equity and get the greatest amount of return on your investment.
Remember, you need to live in a home for a minimum of 5 years in order to net anything off your investment, in order to build equity. The best deals are homes that allow you to move in with instant equity, i.e. making a purchase that is below market value.
2) Don’t choose a home because of it’s proximity to a school
One word: re-zoning. Unless it is an institution of higher learning or a private school, selecting a house based on it’s proximity to one school could have you reeling in years to come.
Select a home based on the rating of the school district, allowing for flexibility should re-zoning in public schools occur. For the most pure and honest ratings of districts in your area, visit www.greatschools.net as this website provides ratings of schools and districts from the parents of its students, not just state run and funded programs.
3) Don’t choose a home because it’s the “nicest” or “biggest” in a neighborhood.
Market value is comprised of a compilation of factors, most notably the value of your neighbors’ homes. Selecting the biggest home in a neighborhood or the nicest is going to make certain that it takes you a longer duration to build equity, as surrounding home values won’t be on par with your own. Having a house that is improved too much is as bad as paying too much for a home with no improvements. Select a home that “kept up with the Joneses” but not one that superseded neighborhood improvements. What is the best strategy? Buy the smallest, nicest home you can afford in the nicest neighborhood to ensure the best return on your investment in 5 to 7 years.
Review historical values for property value increases. If I had a dollar for every time I had been asked whether or not a buyer’s house would increase in value, I wouldn’t need to be in real estate to make a living, because I could simply sell that answer to inquiring folks around the country. The best way to anticipate future property values is to go by historical data. Use historical data to determine the biggest and best rises in property values in your area and make a selection using that as your determining factor, and you will normally be happy with the result when you go to sell several years down the line.