For the majority of us, a house is going to be the most expensive and valuable asset we will own. The average cost of a single-detached house in the U.S. varies per state, but you can get an idea on how much a house costs today by looking at the average mortgage value and terms.
How Much Will Owning a House Cost You?
Based on the latest data from the Bureau of Labor Statistics, Business Insider determined that the average mortgage payment in the U.S. is $1,275, and the most popular mortgage option is the 30-year fixed-rate loan. This figure aligns with the United States Census Bureau’s finding (through its 2018 American Community Survey) that the median monthly cost of homeownership plus mortgage is $1,558.
Even if you are prepared and able to shell out these sums every month, surely you wouldn’t want your money to go to waste. A house is an investment and a necessity, so you need to be certain that you’re getting your hard-earned money’s worth.
Reminders When Viewing Houses
House-buying starts to feel real when you finally go on house viewings. It’s when you get your first taste of what it will be like to drive home to the neighborhood and enter through the garage or front door every evening. At the risk of sounding sentimental, it is during house viewings that you’ll know if a listing that caught your attention calls out to you and makes you feel that you’re home.
A few things to keep in mind, especially if you are a first-time homebuyer:
- Empty rooms feel larger than they really are. Don’t leave it up to gut-feel when figuring out if your furniture will fit the house you’re viewing. Bring a tape measure and record the dimensions of the areas you’re concerned about.
- Ask to view your top choices for a second time. We don’t speak for all real estate agents, but at Cami Jones and Company, we don’t mind arranging these visits for our clients. We know that each succeeding visit will strip away your rose-colored glasses, and you’ll become more attentive to practical things, like the workmanship on the interior trims, alignment of the tiles, the direction of the sunrise and sunset, sizes of the main rooms, ventilation, and so forth.
You’re welcome to ask for details about the houses you’re interested in anytime. Seeing a property in person, however, will give you a different perspective. We’re certain you will think of questions that didn’t occur to you before.
The Six Things You Need to Pay Close Attention To
House viewings are a fun experience, especially when close friends and family go with you. But more than enjoying the visits, use the time to inspect the properties thoroughly and take notes of the pros and cons of each house. This is how you find out which house is the best fit for you.
Here are six things you need to pay extra attention to during these meetings:
Even if you’re not the type to make friends with neighbors, you still need to get a feel of the type of people living next door and down the block. Are there many families with little kids? Does it seem like the people are friendly with one another, or is it one of those neighborhoods where people don’t mind each other? The point is to find out if you feel comfortable living in the area and can mingle with the local community. This is crucial because you don’t want to live in a place where you can’t trust the people right next door.
The immediate surroundings.
It’s also important to consider the physical environment. There are lots of vegetation around the house: is this a pro or a con for you? The neighborhood is near a body of water. Is it prone to flooding? If it is, can you think of contingencies that will make living there bearable? Is being flood-prone forgivable if you consider all the advantages the property offers?
Like the previous item, this is a matter of weighing the pros and cons of a house. You can get this sort of information by observing the structural designs of the houses in the area (e.g., elevated driveways and front steps are common in flood-prone areas) and talking to passersby when you look at the property.
The asking price and how it compares to the rest of the houses on the street.
The next thing you should pay attention to is the cost of the home, the obvious reason being you need to know if you can afford the mortgage for the next 15 or 30 years of your life.
Here’s a quick and simple formula to find out if you can afford a house: add all the monthly housing costs like mortgage, insurance, taxes, and association fees. If it is less than or equal to 25% of your monthly take-home pay, you may be able to afford the monthly amortization. If it’s way higher, better look at another property with a lower asking price.
There’s one more thing you need to think about regarding the price of the house you want to buy. Real estate is an investment: you’ll want to find out if a property you purchase can still increase in value in the coming years. Ask about the median prices of the other properties down the street. If many are priced higher than the house you’re interested in, it could mean that the properties in the area can appreciate (increase in market value) as well. That you can increase the value of a residential property after some strategic improvements and enhancements is something to think about.
The downpayment and other fees.
Make sure you fully understand the responsibilities that come with owning a house. Yes, you must calculate how much your homeownership cost will be per month, but bear in mind that your monthly mortgage excludes the downpayment, closing costs, and your move-in expenses. Make sure you have enough set aside for these when you sign the purchase agreement.
Get the exact amount for the downpayment. Even with a high credit score and a buyer-friendly mortgage loan that allows a 3% downpayment, the equivalent sum can still be a huge amount of money. If, for example, the house you want to buy is worth $350,000, you will still need to pay $10,500 upfront (3% of the full price of $350,000).
Zillow reports that the closing cost of a house sale is typically 2% to 5% of the purchase price. So going by the example above, you will need an additional $10,500 to settle your closing fees. You pay these fees to your lender, so if you have an issue about the inclusions in the bill, like absurdly high administrative costs, you have to negotiate it with them before signing a contract.
The condition of the trim.
As the proverb goes, the devil is in the details. Before a house is opened for viewing, it is customary for the owner to retouch the facade and finishes so that the property will look presentable and appealing to potential buyers. This is also an advantage for buyers because the cost is already factored into the asking price. However, the “facelift” might hide underlying defects that could lead to bigger problems, like basement flooding and thermal leaks.
So if the trim looks brand-new, be more scrutinizing of the adjacent wood or the surrounding concrete. Wood that has traces of discoloration and water marks indicates repeated exposure to moisture. If you see these marks on the walls near the windows and patio doors, it means there might be gaps between the frame and the concrete which you’ll need to do something about later on.
You might consider these trim issues minor, and you’d be right. But if you discover these matters after the sale, you might feel like you’ve been cheated out of your money. It’s better to be aware of these things beforehand so that you can also include them when you weigh the pros and cons of a house.
Lastly, interior trim may also hide other problems like evidence of termite infestation and haphazard wiring. Since the only way to confirm these would be to open up the walls, consider having a house inspection. The findings will reveal any urgent problems with the house and give you grounds to renegotiate the deal.
The shape of the rooms.
Listing photos can be a little misleading. Real estate photographers often use wide-angle lenses to capture all the details inside a room. While these pictures look beautiful, the distorted perspective may hide the real shape of the space. For example, what looks like a standard, private study in pictures could turn out to have a trapezoidal layout. It might not just be one room, too, but an entire wing of the house that has a trapezoidal floor plan. These rooms are often tricky to furnish and design, and you may have to customize a few pieces to make the spaces exactly like you envisioned them.
This is another example of a minor issue that may not dissuade you from buying a house but can become a source of great irritation if you discover it too late.
Work with Real Estate Agents You Trust
Buying a new house signals an exciting new chapter in your life. What sours this experience is when sellers hide serious flaws in the property or lie by omission. It’s important that you find real estate agents who are trustworthy and will look out for your interests as well.
At Cami Jones & Company, you’ll get a boutique-style experience where your concerns and questions are immediately answered. Our seasoned agents negotiate on your behalf and take care of every single detail regarding the purchase of your new home. You can count on our guidance throughout the entire process.
Contact us to schedule a meeting.
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