Despite rising mortgage rates crushing the real estate market, owning a home is generally regarded as a better investment than renting because you can build equity. For the past two decades, the U.S. real estate market has grown exponentially and is expected to reach $3.81 trillion in 2022.
The growth in the real estate market has resulted in low-interest rates, attracting many prospective homebuyers. However, interest and mortgage rates are just one of the factors you should consider when it comes to buying a new house. Before starting the paperwork, conduct comprehensive real estate market research focusing on these crucial aspects.
Location
The location of a house is of high importance to real estate investors, prospective buyers, and sellers, and it remains one of the most decisive valuations and price determination factors. Buy a property in a prime location to enjoy a higher appreciation rate.
In addition to retention or increase in value, you will enjoy easy access to amenities like schools, shopping centers, and main roads. Examine the house’s location before making an offer since it is one of the factors you cannot alter.
Condition and Age of the House
Prospective homebuyers are usually more willing to make an offer for newly constructed houses to avoid renovation and repair costs. However, if you are open to buying an older house, consider the condition and age to avoid expensive repairs and upgrades.
A thorough home inspection will help you identify the areas that require repairs or upgrades, particularly the physical structures, such as roofs, floors, ceilings, and walls. Based on the inspection results, establish if you have the time and money to carry out the repairs, improvements, and upgrades.
In addition, a realtor can help you get information regarding houses for sale in New Orleans if you are considering moving into that area.
Purchase Price
As an aspiring homeowner, conduct thorough market research and analyze the price trends in a particular real estate market to know if it is worth paying the price that the seller quotes. Establish your budget and ascertain the paying capability before making an offer for a new house.
An excellent way to set your price range is by calculating the debt-to-income ratio to get a clear picture of the affordability. In addition to the purchase price, consider the application and closing costs, such as mortgage application fee and home inspection costs, insurance and property taxes, and down payment options.
Amenities and Infrastructure
In today’s competitive real estate market, investors are spending on amenities to make their property more attractive to potential buyers. Amenities, such as pet-friendly space, fitness center, security, detailed finishes, major appliances, and swimming pool, increase a property’s value and make a house more comfortable.
On the other hand, consider access to public amenities like highways, public transit, and shopping centers for utmost convenience and comfort.
Size
Your family situation should influence the decision on the type and size of house you want. Assess the square footage of the house, the number of bathrooms, bedrooms, and stories, the orientation, utilities, parking space, and appliances. If you plan to expand your family, consider a big house with several bathrooms and bedrooms.
When it comes to the kitchen, examine the layout as it influences the functionality of the space. Since home appliances can be costly to replace, consider a house with up-to-date appliances to reduce energy costs.
Seller’s Incentive to Sell
Even though most real estate markets have shifted to the seller’s market, buyers still have an advantage in some markets, forcing sellers to offer incentives to nudge them to table an offer. The most common incentive used by sellers is setting a fair price. In addition to fair pricing, some sellers offer financial incentives, such as closing costs assistance, making it easy for a home buyer to close the deal.
A highly motivated home seller will always offer room for price negotiation. A realtor understands the real estate market and will help you find a seller who accepts counteroffers to get the best price.
Closing Thought
Homeownership remains an important part of the American dream because it is considered a measure of wealth. Nonetheless, purchasing a home is one of the biggest investment decisions that require a thorough real estate market analysis. Since the home buying process is complex and lengthy, consider these important factors to make an informed decision and smoothly dive into the realm of homeownership.
