I’m ready to jump into the real estate market and buy a home — now what?

The Most Important Factor

The first (and I would argue the most important) thing to consider is what your short and long terms goals are and what you’re hoping to achieve by investing in real estate.

Whether this is a house you’re just planning to live in for 5-10 years, it’s your forever home, or an investment property, there are a lot of considerations you’ll need to make. Is the goal to buy a home that’s value will double in 10 years, sell it, and buy the house you really want? Or is it to buy in your ideal location and then expand or rebuild when you have the budget to do so?

Think about your long-term goals and then ask yourself if the property you’re considering aligns with what you’re trying to achieve. If it doesn’t align, then keep looking. The right house is out there. And if it does align with your goals, then keep reading for other factors to consider.

Things to Consider when Buying a Single-Family Home

It’s exciting to start thinking about the things you want to look for in a new home — whether that’s an open floor plan, a chef’s kitchen, a certain number of bedrooms, or a great backyard. But if you’re considering buying a single-family home, here are some things to consider to make sure it’s the right house to invest in:

Location and Price

Sometimes the price might seem great, relatively, but you have to ask yourself, is this location where I want to live for the next 5-10 years? You also need to think about it from a liquidity standpoint. If I want to pick up and move, is this a location that will sell quickly? Or if I were to be in the market to rent, rather than buy, would this be a property that I would be interested in renting? If your answer to these 3 questions is yes, you may be in good shape. You may also want to ask a friend, your agent, or someone that’s knowledgeable about the location and can give you their honest opinion.

The Lot

What’s the property like? Is it sloped or flat? Is it wide, or narrow, or does it have an irregular shape? What are the required setbacks for this property? Are there any building or height restrictions? Is remodeling, adding on, or building a new home on the site subject to design review? What are the surrounding homes like, how close are they to the property, and what are their setbacks or building restrictions? These are all questions you should have answers to, understand, and agree with. These will help you decide if the property truly meets your needs.

Structure

What type of foundation does it have, and how old is it? How’s the site drainage? What about the electrical, plumbing, HVAC, roof, etc? If you’re planning on doing any immediate remodeling, or even later down the road, you need to understand what’s possible, so you have realistic expectations and can budget correctly. Knowing this might help you avoid certain homes altogether and really narrow your search criteria.

Resale Value

As a broker that heavily values client relationships, I’m always thinking to myself — aside from this property meeting the client’s needs and them being excited about it — is this property going to put my clients in the best position possible when they sell in the next 5-10 years? Could they be doing better? How can I set them up for success given what I understand about the property they’re considering, market conditions, and what I’ve personally seen work well and not so well? I want it to be an absolute home run when it’s time to resell. 

Buying a Single Family Home or Condo/Townhouse?

From an investment standpoint, or looking purely resale, a single-family home may be a better option than a condo or townhouse. There’s land value, there may be potential to expand or rebuild later down the road, and in most cases, you don’t have to deal with HOA dues or special assessments.

On the other hand, there are some benefits to buying a condo or townhouse. They’re more affordable, you typically don’t have to deal with exterior maintenance, and most condos/townhouses are newer, so you don’t have to deal with updating electrical, replacing single pane windows, etc. 

Studies show the average person will move 11 times in their lifetime. It’s also pretty common for people to refinance in a 5-10 year period, whether they’re offered a better interest rate or increase their loan amount to pay for a remodel. So if you are likely to end up moving in 5-10 years, a single-family home might appreciate more and give you a larger budget to work with for the next house.

If you’re considering a purchase, and have questions about disclosures, or other property-related issues, feel free to reach out anytime.

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Cliff Whearley  is the Broker at Whearley & Co. Real Estate. He has been a resident of Redwood City for over 30 years. If you’re buying or selling a home or have any real estate questions, he would love to work with you!