Did you know?
The biggest, most expensive house on the street is usually not considered to be the best investment.
The best investment potential is traditionally found in a less expensive, more moderately sized home on the street.
After you have considered how much money you can put toward a down payment, and how large a mortgage you can qualify for, you will have a good idea of your price range. Now you should decide on the home style, whether or not you have a vision of your "dream house." You probably have some idea of the "look" and size of the house you want, and what location suits you, however making a wish list of important criteria can help you and your real estate professional assess your house-hunting requirements. By narrowing the range of suitable houses, you will waste less time looking at undesirable homes that don't meet your requirements.
New versus older home
Current real estate and MLS statistics show that eight out of ten homebuyers purchase an existing rather than a newly-built home. Some people like the idea of moving into a brand new house. On the other hand, many people prefer older homes because they may offer special features and more space for the money. If you're handy with tools, you may be willing to consider a house that needs work (what the real estate ads call a "handy-man special" or "fixer-upper"). You may insist on a house that is in perfect condition, but most home buyers fall somewhere between these two extremes, and even finicky buyers often decide to accept some imperfections when they see the price of perfection.
Newly-built houses are typically clustered together in areas where the sizes, styles, and prices of the homes are much the same. New homes are likely to have more efficient heating systems, may be better insulated, and should cost less to maintain than older homes. Older homes, on the other hand, may be larger, more unique, made with better quality materials, and are located closer to the action than the sprawling suburbs.
Location
For many people, the location of the home is probably the most important consideration. For many others, location may not be a choice. You may already know in what neighborhood you will be looking for a home.
Choosing a neighborhood
Consider what's important to you. Do you need to find a home that is near your
job site, public services, or day care facilities, or are you willing and able
to travel some distance to and from work in order to live in a specific neighborhood?
Are neighborhood schools a major factor in your home buying decision?
Is nearness to shopping, recreational activities, or public transportation particularly
important?
Size requirements
In choosing a home, an important consideration is the number and the size of the rooms. Is the house large enough or too large for your family size? Will your family soon outgrow this house? Will you be paying for "more house" than you need? The amount of land on which the house sits (the size of the lot) will also influence the price of a house. If space for a yard, garden, or off-street parking is important to you, this may narrow or expand your options.
In determining the size of the house to buy you will want to consider both your current and your future housing needs. You will want to consider looking for a house that will be adequate for at least the next 5 to 15 years.
Special features
You should also consider whether there are any special features in a home that would be particularly important to you and your family. Do you need space for a laundry facility? Is a garage a necessity? How about a second bathroom? A porch? Central air conditioning? Wheelchair accessibility? Wiring for internet access? You may not find a house in your price range that offers everything you want, but it helps to be able to tell a real estate professional what features are most important to you.
Types of homes
Your decision as to the type of neighborhood you want will have considerable bearing on the style of houses that will be available.
Keep in mind
Rental income can help with your housing costs.
Many home financing plans, including FHA and VA
can be used for buildings up to 4 units, if the buyer intends to occupy one of them.
A single family home
This is a real estate term for "house." As the nomenclature implies,
this is a single structure that occupies its own lot for the
purposes of housing one owner-occupied residence. When you search the Realtor®
Multiple
Listing Service (MLS), you will find "houses" listed under the single family home category.
Compare this type of home to a multi-family home, which can be a duplex,
a four-plex or any other type of multiple residence property in which the owner
may occupy one of the units (and rent out the others), or simply rent out all the
units as income-producing property.
Condominiums (Condos)
Condominiums are the starter home of choice for many homebuyers today because
they are generally smaller and less expensive than the conventional single family
home. The term "condominium" does not describe a particular style of architecture,
but rather a type of joint ownership. Each unit is individually owned, while
the facilities and common space (the surrounding land, the hallways and elevators,
and any recreational facilities) are owned collectively by all the owners. In addition to the monthly mortgage payment, condo owners also pay a
common area assessment (or "condo fee") which pays for the management of the complex, the upkeep of the common property
areas, and sometimes even the cost of the utilities. A condo can combine some
of the advantages (and disadvantages) of apartment living with those of home
ownership.
Condo owners can reap the same financial benefits (tax breaks and equity buildup) as other homeowners without many of the traditional chores of homeownership, such as fixing a leaky roof and mowing the yard. Moreover, condos often offer such amenities as landscaping, meeting rooms, and recreation rooms, and many are planned communities offering wooded areas and play space.
Selecting a condo is more complex than buying a single family home. You need to investigate not only the specific unit in which you are interested, but also the entire project from both a physical and financial standpoint. A townhouse condo is another type of condominium in which units of two or more stories share common walls. Each unit has its own ground space but like other condos, the common spaces and facilities are collectively owned by all the unit owners.
Cooperatives (Co-ops)
Co-ops resemble condos in that they involve a form of collective ownership. However,
legally they are quite different. Co-op owners own shares in a corporation rather
than owning the individual units in which they live. Cooperatives are a well-established
form of ownership in New York City and some other parts of the country, and can
also be found in the downtown area of St. Petersburg.
Planned unit developments (PUDs)
A planned unit development is a project or subdivision that consists of common
property that is owned and maintained by an owner's association for the benefit
and use of individual PUD unit owners. Many "retirement communities" are planned unit developments.
Manufactured housing
Most new homes in the United States are site-built to state and local codes,
but an increasing number are becoming "manufactured housing." Manufactured homes are built in a factory and then assembled on the lot,
or they can be prefabricated housing units which include but are not limited to mobile homes. Often, manufactured homes can look like a site-built home,
so ask the owner if you have any questions.