Before you plunk down your hard-earned cash for what seems to be the perfect home, step back and take time to consider the following:
A Comparative Market Analysis
Ask your real estate agent to provide you with a Comparative Market Analysis (CMA). A CMA compares similar homes in the same neighborhood that have sold in the past six months to a year or are still on the market. The house you want should compare favorably in price, with the price properties sold for being more indicative of real estate value than the listing price. The more similar the features (square footage, number of rooms, number of bathrooms, age, lot size, etc.) and the more recent the data, the more accurately the CMA reflects the current market.
Location, location, location
It’s an old real estate saying that the three most important factors to consider when buying a home are all location. It’s certainly true when determining price. The least fancy home in a good neighborhood is worth more, in the long run, than the fanciest house in a bad neighborhood.
To evaluate the house you want, research the local housing market. Browse the Internet, local newspaper ads and real estate publications. Visit nearby open houses, talk to the neighbors and keep your eyes open. The best neighborhoods have good schools, nearby amenities such as grocery stores and parks, as well as a low crime rate.
The condition of the home
Look past cosmetic repairs such as a fresh coat of paint and new carpeting. These could disguise defects such as peeling walls or cracked flooring. And try to ignore decor. Those beautiful paintings, vases overflowing with flowers and freshly baked cookies won't be there when you move in. Focus instead on basics that add value such as a solid structure, a roof and basement without leaks and heating, electrical, plumbing and other systems that work.
