|
Much like buying a used car, buying a home can be a risky proposition. But unlike a vehicle, home buyers can't take a house out for a test drive. While there are professional home inspectors to detect some of the more hidden problems, there are also several things a home buyer should be able to detect on his own.
When many home buyers first walk into a home, visions of what they'll do with the place soon form in their heads. Where to put furniture or what to do with certain rooms can be overwhelmingly euphoric feelings. Still, blocking out these thoughts is a must when making a home-buying decision. Rather, give an impartial eye to the house. Though you might love a home's hardwood floors, check to see if they're level. Unlevel floors are indicative of structural problems, a big no-no when it comes to home buying. Also, if the doors stick or drag, this is another indication of possible structural damage.
There are also signs to look for that will indicate how well the seller took care of the place. Cracks around windows and wear and tear that was not properly maintained are signs of poor upkeep.
Electrical problems will not be as easy to observe for most potential home buyers. That does not mean, however, that you cannot keep your eye out for any potential electrical problems. If any wiring is exposed, for instance, alarm bells should go off, especially if you have children. If there are any visible electrical problems that are not listed on the seller's statement, you might want to get the house out of your mind, regardless of its aesthetic value. Another easily detectible electrical area is in regards to the outlets. Do they feature two prong holes or three? Older homes may not be wired to accommodate higher amperage appliances and will need to be updated. Although you can convert two-pronged outlets to three with special outlet converters, you might risk overloading the circuits and blowing a fuse or starting a fire. While there are an abundance of other electrical problems, these are the most easily detectable with the naked eye.
It's also a good idea to do some preliminary plumbing inspection on your walk-through. Many times simple plumbing issues can be overlooked by potential home buyers, as it's easy to assume running water and basic plumbing functions are up to par. However, there are some indicators you can check for to give you a good idea of a home's plumbing. For instance, you can run more than one faucet at once to check water flow. If the flow decreases drastically as you turn on each new faucet, you're probably going to need all new pipes, a job that can be expensive. Also, run the shower and/or tub at a normal speed for several minutes. This will tell you if the house has drainage problems you might want to avoid. It should also indicate whether or not there are leaks around your fixtures. Check the piping, too, as mixed pipes with both metal and plastic are indicative of amateur home repairs, which could be equated with neglect and years of problems. Also look at the ceilings located below upstairs bathrooms. Have the ceilings been recently painted? Although this might mean the homeowner has been cleaning up for the sale, it could also mean he's trying to cover up stains from past leaks. The same can be said for new flooring in bathrooms or kitchens. Anything that seems dramatically out of character with the rest of the house might be a sign of a coverup.
Another thing you can easily notice is the home's location. If the home is situated at the bottom of a hill or the land around is sloping downward in the direction of the house, flooding might be a problem. This can negate any positive effects of a basement and can also lead to extensive problems down the road.
While many people dream of owning a vacation home, oftentimes it is looked at as a luxury available solely to the wealthy. That's a perception that is largely true, as approval for second home mortgages is more difficult than for primary home mortgages. Also, higher down payments on second homes are typically required, as lenders look to protect themselves from borrowers who might be more prone to missing a payment on their vacation home than their primary residence.
Still, for those in the position to afford and be approved for a second home, the decision on whether or not to do so is no slam dunk. Rather, the following financial considerations should be taken into account before you go second home hunting.
• Costs. Even though you won't be living in the house the entire year, the traditional costs that apply to your primary residence will still be there. Financing fees, utility bills and property taxes, among other things, will all still apply. In addition, for those looking to rent out their second home during periods of time they know they won't be using it, that can potentially prove more limiting financially. Oftentimes, renting the property out means you're no longer eligible for certain tax exemptions.
• Compare and contrast. While it's always nicer to own your own place, is it really worth it for you? This can be determined with a simple examination of past vacation's receipts. How much do you typically shell out in hotel or rental fees or other traditional vacation expenses such as food and beverages? If a second home makes financial sense in that regard, then you might be making the right decision getting a second home. However, for those who typically don't spend too much time on vacation or would prefer to travel to different locales, then a second home might not be for you.
• Look at different properties available. Just because you can afford a second home doesn't mean you need one. Less expensive condos or timeshares can make you feel just as at home on a vacation and might be able to save you substantial amounts on property taxes, fees, etc.
• Speak to an investment professional. If you're not currently in a position to afford a second home but would like to be someday, consult a financial planner or advisor and tell him about your goals. If you stay disciplined and start far enough in advance, you should be able to establish a plan where a second home is less a dream and more a reality.
• Know the tax laws. As mentioned earlier, your intentions with property can greatly affect the amount you'll be taxed or allowed to deduct. Don't let these laws be a surprise after you've bought your second home. Know exactly what you can and can't do with your property and how certain things like renting out the property will affect your tax situation. Consult a tax professional to learnabout the various tax implications that could make or break you financially.
• Is it what you really want? For vacationers who enjoy time off in the summer and the winter, perhaps a second home isn't the best route, as you likely won't be able to ski and surf in the same locale, meaning you'll still be spending additional money on hotels and other services that a second home should negate. Also, the burdens of meeting the bills that come with a second home can limit your ability to take that second vacation. Understand all the costs you'll have to face once you sign the dotted line.
• Benefits of a second home. There are advantages to owning a vacation or second home. Firstly, you'll build equity on the home for each year you own it, provided the real estate market remains as prosperous as it is currently. Secondly, knowing that your vacation home is equipped with your favorite foods, clothing and recreational items makes embarking on a vacation that much more pleasurable — there are fewer bags to pack, etc. Thirdly, there's always the option of selling your main residence and renting close to where you work through the duration of your career. Then you can focus on making your vacation home a retirement retreat.
Considering buying a new home or selling yours? You may want to pay attention to the styles of houses available. When browsing through the real estate section, here are some of the most common ones you'll discover:
• Ranch - A single-story dwelling with a low roof.
• Raised ranch - Also known as a "split-level," this home may feature a finished basement with windows to create a lower living space, and a raised roof that offers room for bedrooms above.
• Cape Cod - Small, center-hall styled house with a steep roof that allows for living space in the attic. Some will feature an attic dormer to allow for extra space and illumination.
• Colonial - A house generally featuring a symmetrical design in floor plan, windows, roof, etc. "Center hall" signifies the main entryway in the center of the house.
• Tudor - An English-style, imposing house with fortress lines. Exterior is typically stucco or stone with exposed half timbers.
|
