Buying a new home is big decision. Doing your homework to understand as much of the process as you can puts you in position to find the right home and feel comfortable about the purchase. As you search for your new home, here are five statistics new home buyers will want to be aware of.
Number of Home Buyers that Begin Their Search Online: 90%
It is no secret: we rely on the Internet for a growing number of our daily “needs.” Why should buying a new home be any different? Starting your search for a new home online allows you to centralize a majority of the information – mapping out the various areas, then neighborhoods and eventually specific houses you are interested in – all from your living room. As you search for your new home, be as specific in your research as you can be. Build a list of comparables, research the school districts, see the crime stats, map out your commutes, etc. The more you know, the more successful your home buying experience will be.
Minimum Number of Years You Should Plan on Living in New Home: 5-7 Years
In most cases, new home purchases make the most sense for those home buyers who plan on living in their new home for at least five years. The reason: high transaction costs may result in you losing money if you plan on selling the home soon. Combine the agent’s payment (4-6% of the sales price) with your monthly costs and these expenses can add up and outpace your home’s price appreciation rate.
The Number of Days the Home has been on the Market
A basic assumption when looking at homes is: awesome homes in awesome neighborhoods do not last long when priced accurately. When considering your options, dig in to the number of days the home has been available on the market. If it has been available for some time, work to understand why. Is the asking price too high? Are there structural issues you need to be concerned about? Or has it simply not been shown correctly?
The “Out the Door” Costs
When looking at homes that fall within your budget, be sure to factor in the complete monthly costs associated with buying the home, especially the big three: mortgage, estimated taxes, and insurance. You can also ask for an estimate of the monthly bills to get an even more accurate understanding of what your monthly costs will look like, but being aware of this information will allow you to home in on (no pun intended!) which homes are in your budget.
The 43% Rule
This is a newer addition to the housing market but the general rule of thumb when applying for a mortgage is that your debt cannot be more than 43% of your gross monthly income. While there are exceptions to this guideline, being aware of this up front helps you to ensure that your finances are in order before you start applying for your mortgage.