Considering A Fixer-Upper? Follow These 21 Tips

Fixing up a house — either to live in or to flip — has become an increasingly popular dream, and it makes sense: Who doesn’t love watching all those shows on HGTV while you ponder how much money you could make on your own flip (or how nice it would be to live in a fully upgraded house) one day?

That’s the dream, anyway. The reality can be a lot messier, and a heck of a lot more expensive, than what you see on television. So before you start thinking seriously about buying a fixer-upper, make sure you know what you’re getting into and how to come out on top by following the best-practice tips.

Be realistic about project scope


The fixer-uppers that need the most work are going to be priced at the bottom of the market, and therefore they’re probably going to be pretty attractive — especially to someone who’s never fixed and flipped a house, and who doesn’t necessarily understand what’s involved. And oftentimes, a fixer-upper requires more than just a cosmetic update; there could be structural issues, plumbing problems, or the house might need to be rewired entirely, just to name a handful of potential fixer-upper pitfalls.

Not only do you need to be realistic about the project scope for each individual fixer-upper that you’re considering, but you also need to think about your own, personal project scope wants and needs. Are you hoping for an almost-move-in-ready type of job, where you’ll just be replacing some flooring and painting the walls? Or are you prepared to tackle a full gut-and-repair type of job?

Set a budget


It’s probably not a newsflash that updating a house costs money — sometimes a lot. The fixer-upper itself might not be all that expensive, but bringing it up to par with the rest of the market (or above) is definitely going to cost you. Talk to any partners going in on this project with you, and ideally a financial advisor, to hammer out how much you can realistically afford to spend on the fixer-upper and to explore any funding ideas that you might have.

If you’re not sure what a realistic fixer-upper budget looks like in the area where you’re searching, then it’s useful to find a local contractor who can give you some ballpark figures for what you can expect to spend. (And you’ll probably be glad you connected with that local contractor before all is said and done, anyway!)

Set a calendar


Buying a fixer-upper to improve and live in might not require a strict calendar, although it is a good idea to give yourself some general parameters around how long you really want to spend working on the house, whether it’s one year or five. But if you’re planning to fix-and-flip the house, or fix it up and rent it out, then a calendar becomes much more critical.

Remember: You are on the hook for the mortgage while you own this house. If you can’t fix it within your ideal time frame, then not only will you be paying for the repairs, but you’ll continue to carry the mortgage loan, too. And if it doesn’t rent or sell as quickly as you’d hoped, then that’s another month of payments you’ll have to make. 

This is another area where a local contractor or even a real estate agent might be able to help. They usually know a lot about the permitting and repair process, not to mention the local contractor market and how busy or relaxed it is at any given time of year, and they can give you a guesstimate as to how long fixing a fixer-upper should take.

… Then be willing to wiggle with both


Of course, life happens, and you can’t always expect things to go according to plan. Contractors don’t always know how much help they’re going to have, or they might be booked for months — and weather can also be a factor. That’s why it’s always smart to remember that your budget and calendar might act more as guidelines than hard-and-fast rules, and you should be prepared to extend one, the other, or both beyond your projected expectations.

If you know going in that your budget and your calendar aren’t set in stone, it’ll be easier to bear when something inevitably shifts and you wind up a little bit (or a lot) behind schedule or over budget. Just have a contingency plan in place in case that happens so you don’t overextend yourself financially.

Find the right location


Some fixer-uppers are going to be a lot more lucrative for an investor than others — and to find them, you’ll want to start with location. A fixer-upper that’s surrounded by a bunch of houses that also need a lot of work isn’t going to flip for as much as one that’s surrounded by luxury homes, for example. And even though you probably won’t find too many fixer-uppers surrounded by luxury homes, there are plenty in up-and-coming neighborhoods that are just as potentially viable.

Talk to an expert in the area (like a real estate agent) about where to find a house that needs some TLC but could yield a great return for you, and then start targeting homes in your price range in that spot. That’s the best way to narrow your search in a manner that doesn’t restrict you too much and gives you the highest chance of finding an excellent deal.

Look for a ‘most popular’ house


The most popular type of residential property in the area is going to vary depending on where you are. In some suburbs, it’ll be a three-bedroom house with a yard, while in other downtown artist enclaves, there will be a lot more demand for studio condos with room to create. A hotspot for retirees might favor one-story homes with just two bedrooms, and maybe graduate students in the nearby college town are most interested in small, easy-to-manage units within walking distance of campus.

Wherever you find that fixer-upper, make sure you understand what the most popular homes in its neighborhood look like. If the fixer-upper doesn’t resemble that profile — and it would cost a lot of money to get it to conform — then you should probably pass and move on to the next opportunity.

Think about the layout


It’s not enough to just know how many bedrooms and bathrooms are ideal for your target renter or buyer (or yourself). You’ll also want to look at the home’s layout and ask yourself whether it needs work, and how much that work might cost.

For example: Many modern homes have an open floor plan between the kitchen and dining room, and sometimes the living room, too. And newer parents often prefer a master bedroom that’s on the same floor as their baby’s nursery or toddler’s room. Think about the type of person who’s most likely to want this house when you’re done with it (even if that’s yourself!) and then ask yourself what needs to be fixed in the layout (if anything) and whether you can afford to fix it.

Consider condition


Some fixer-uppers are going to be easier to handle than others. A house that was mostly well-maintained but not updated significantly for decades is probably going to be an easier lift than one that’s been sitting abandoned for a couple of years. If your budget and timeline aren’t going to accommodate a house that’s in really bad condition, then you need to know that before you make a mistake and put an offer on a house in really bad condition.

Real estate agents and real estate inspectors are pretty familiar with the typical problems that houses encounter (and it’s slightly different depending on where you live, the climate, the neighborhood, and so on). If you’re not sure what big condition red flags you should be seeking out, then tap someone like that to help you set some parameters around condition.

Know your loan options


Some people think a mortgage loan is a mortgage loan is a mortgage loan — but those people probably haven’t been keeping up with the financial industry. There are a lot more options for buyers these days, including loans specific to fix-and-flip deals that usually involve shared equity. In other words, there are companies out there that will help you with the down payment or finance the sale and possibly even pay for repairs on the home in exchange for their money back and a slice of the profit you make from the sale.

Depending on what your plans might be for this fixer-upper, talk to a mortgage broker and do some additional research to figure out what options you might have. You’ll probably be pleasantly surprised by how many there are!

Get a pest inspection


Hopefully you’re well aware that a general inspection is very important when buying a fix-and-flip, but there are other inspections that might not be on your mind but that are still a really good idea. A pest inspection is one of them — one of the last things you want to discover when you start to take on the serious repairs is an infestation of insects, rodents, or any other wildlife that doesn’t belong inside. If you live in an area where there aren’t a lot of pests, maybe you can skip this one, but it’s almost always worth considering.

Consider a sewer line inspection


Did you know that some sewer lines are made with clay pipes — or Orangeburg pipes, which are made from wood pulp and tar? When a sewer line backs up or breaks, it’s not very fun for the occupants, and this is an inspection that may turn out to save you a lot of money, especially for an older home. If you have any misgivings or questions about the sewer line, don’t play a guessing game; call in a professional.

Think about an engineering report


An engineering report and structural inspection will tell you everything you need to know about the foundation on the house, and whether it’s at risk for any future issues. This isn’t always a necessary part of a transaction, but with a fixer-upper — especially an older one in poor condition — it’s probably not a bad move to cover your bases and get someone to take a look at everything before the final papers are signed.

Facilitate communication between players


There can be a lot of people involved in polishing up one fixer-upper, from real estate agents and inspectors and appraisers and mortgage brokers or other loan contacts during the buying process, to general contractors and specialists during the actual fixing, and possibly future renters or buyers, too.

One person is probably going to know more than anybody else about exactly what’s going on with this fixer-upper — and that’s you. So to make sure you’re successful and everything sticks as close as possible to your schedule, be prepared to act as the point person and facilitate communication to the best of your ability.

Find the right people


Some general contractors are experienced with fixer-uppers, while others mostly work on new construction. You probably also need to call in some people who are more specialized in their work — plumbers, electricians, stonemasons, landscapers, and so on. As you’ll be working with all of these people to make the property shine, and they’ll be working together at least to some extent, try to find the right people for the job.

It’s up to you to decide who the right people are. Maybe you’re prizing speed over craftsmanship — which is absolutely fine; it’s your rodeo, and these are your clowns — but if that’s the case, then you probably would be wasting the luxury-home contractor’s time by asking for a quote. Be sensible about what you want to accomplish and then go looking for the specific folks who can help you get there.

Shop around for appliances and supplies


The big-box stores are always one place to find appliances, and the home improvement or hardware store may be convenient for supplies — but if you know where to look, you might find some excellent deals on the nuts-and-bolts ingredients for your fixed-up place.

If you know any other people who’ve worked on fixer-uppers in the area, it won’t hurt to ask them what they know about where to find good prices on high-quality appliances and supplies. You can also ask contractors, real estate agents, and other experts in the area to help you track down reclaimed wood or farmhouse sinks on the cheap.

Familiarize yourself with the neighbors …


You might not be planning on living in the property at all, but don’t make the mistake of thinking you can ignore the neighbors. They are going to be dealing with the noise, traffic, and possible inconvenience of your fixer-upper plans, possibly for months, and if you want a minimum of trouble, then it’s smart to introduce yourself early and explain what you’ll be doing and how long you’ll expect it to take.

It’s probably also a smart move to give them your email address or cell phone number and ask them to contact you if they’re experiencing any problems with the work you’re doing on the house. Just telling them where to complain and how to reach you can really help you avoid bad blood down the road.

… And any home associations involved


You don’t need to give the homeowners’ association (HOA) your phone number, but it is wise to at least familiarize yourself with the bylaws and restrictions of the HOA, if there is one. Those restrictions often govern things like additions, and some outline things like exterior paint color and landscaping requirements. What you don’t know can actually hurt you in this case, because the HOA can fine you as the owner for noncompliance with their rules, and that’s probably not another expense you want to incur if you can help it.

Know your permits


The HOA isn’t the only entity that cares about what you do with your property. Cities and counties usually have policies around what you can and can’t do, and for some improvements, you may need to get a permit approved in order to move forward. This is something best done on the front end, and some cities and counties are a lot slower (or more overworked) than others, so try to get it done as early as possible.

Know where and when to compromise


It’s rare in life to get absolutely everything you want, and that’s probably going to apply to this fixer-upper experience, too. Maybe your preferred carpet is too expensive; maybe the faucet and tap sets you were eyeing for the bathrooms have been discontinued. Maybe the improvement you want to make to the house is not permitted by either the HOA or the city or county.

Whatever the case, know that like anything else in life, this probably isn’t going to go 100% to plan — and that’s okay. Take some deep breaths and find the next-best thing. And if there’s something that you absolutely cannot compromise on, make sure everyone involved in making it happen knows that it’s do-or-die — and be willing to be flexible with everything else.

Prepare for the worst


No matter how much planning you do, and how hard you try to prevent it, things will happen to mess up your fixer-upper experience — for sure. Something might happen with a permit, or heaven forbid, your loan. Contractors could cancel on you, and it might be impossible to find another one. Buyers and renters are going to fall through.

None of that will be a traumatic, terrible thing if you remind yourself constantly to prepare for the worst. You don’t need to actually have eight contractors on standby, but come up with Plans B and C for every step of the process so that you’re ready to pick up the pieces and keep moving toward your goal when something inevitably does go wrong.

Shore up your emotions


There’s a reason why it made a ton of sense for a network like HGTV to go big on fixer-upper content — there’s a lot of emotion involved in fixing up a house, and nothing makes compelling reality television like heightened emotions. Between the elation of closing on the house, the daunting exhaustion after day after day of work (and still no apparent progress), the frustration of plans falling through, the satisfaction of a finished improvement, and every other feeling in between, it’s an activity that sometimes runs the full spectrum of human emotion. 

Be prepared for the potential to feel overwhelmed by how much you’re feeling — then remind yourself of the reasons why you got into this fixer-upper to begin with. Whether it’s making a profit and building wealth, generating some extra monthly income, or simply wanting to live in a house that’s nicer and brighter than the one you bought, your core reason to buy a fixer-upper will help guide you across the finish line.

Federal Update

Though the Arizona Legislature is currently not in session, the National Association of REALTORS(r) continues to monitor activity at the federal level.  From risky mortgages and flood insurance, to short term rentals and water quality, your legislative and government affairs team has several updates to share.

BELOW

During this week’s National Convention, we will be meeting with representatives from NAR to get updates on issues we’re currently focused on at the federal, state and local levels. We’ll bring back reports from NAR policy committees, as well as receive updates on RPAC and Community Outreach programs.

What You Should Know About the Class-Action Lawsuit Against NAR

Committee Passes Terrorism Insurance Reauthorization Bill

The “Terrorism Risk Insurance Program Reauthorization Act of 2019,” approved by the House Financial Services Committee, would reauthorize the Terrorism Risk Insurance Program (TRIP) for seven years.

House Passes the Corporate Transparency Act

The anti-money laundering (AML) legislation is designed to stop the formation of anonymous shell companies created under state law that are often used by bad actors to launder money or to commit other illicit financial crimes.

NAR Joint Op-Ed Published

NAR published a joint op-ed to counter a growing narrative that the Federal government has expanded its exposure to risky mortgages.

CFPB Director Testifies Before Congress

CFPB Director Kraninger provided her semi-annual report to Congress to discuss current updates and developments at the Bureau. She also provided some insight on the qualified mortgage (QM) patch, stating that the Bureau is working on a plan as the transition to end the QM patch is forthcoming.

TRIA Reauthorization Hearing in House

The Terrorism Risk Insurance Program (TRIP) expires at the end of 2020 unless Congress reauthorizes it.

DC Circuit Court Decision on Net Neutrality

The DC Circuit Court of Appeals upheld the FCC’s decision but found that the FCC had overstepped its authority when it banned states from enacting their own net neutrality rules.

New Bill Reforms EB-5 Program

Senators Grassley (R-IA) and Leahy (D-VT) introduced the EB-5 Reform and Integrity Act of 2019, which includes reform and long-term reauthorization of the the EB-5 Regional Center Program.

EB-5 Program Reauthorized

Congress extends EB-5 Regional Center Programs authorization through November 21, 2019.

Agencies Increase Residential Appraisal Threshold

The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively “the Agencies”) adopted a final rule increasing the threshold for requiring an appraisal in residential real estate transactions from $250,000 to $400,000.

IRS Improves Deduction Safe Harbor for Mixed-Use CRE

The Internal Revenue Service this week released final guidance regarding a safe harbor to help owners of real estate enterprises determine whether they qualify for the new 20% deduction for “qualified business income.”

House Passes SAFE Banking Act

H.R. 1595 creates a safe harbor for federally-insured financial institutions to provide services to cannabis-related businesses in states that have legalized the substance.

Expanding Access to Credit

The House Financial Services Committee passed a number of NAR-supported bills to expand access to credit.

Roundtable Introduces ESA Reforms

The Congressional Western Caucus, chaired by Rep. Paul Gosar (R-AZ), held a roundtable on 9/24 with several House members and officials from the Department of Interior to discuss a 19-bill draft legislative package they will be introducing to reform the Endangered Species Act.

NAR Urges TRIP Reauthorization

NAR joined a stakeholder coalition letter to all Members of the U.S. Congress urging a long-term reauthorization of the Terrorism Risk Insurance Program (TRIP) before its expiration at the end of 2020.

Legislation on Short Term Rentals

There has been a lot of press coverage of a new bill introduced in the House that deals with short-term rentals.

NAR Submits Comment to CFPB on Its Proposed Qualified Mortgage Rule Patch

NAR submitted a comment to the CFPB regarding its advanced notice of proposed rule making on the qualified mortgage rule “patch”.

NAR Attends CFPB Innovation Policy Event with Director Kathy Kraninger

The Consumer Financial Protection Bureau (CFPB) held a press event in Atlanta to announce its new innovation policies and also to announce the opening of a new bureau office in Atlanta.

NAR Expresses Concerns with STRONGER Patents Act

The legislation would overturn decades of Supreme Court precedent about indirect infringement and what it means to “induce infringement.”

 

 

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13 Questions About Home Inspections, Answered

If you’re not familiar with home inspections, then you might have a lot of questions about what gets inspected, how thorough the inspectors are, why you even need one, and what you can expect if you’re walking with an inspector through the house you’re hoping to buy.

There’s a lot to know about home inspection, and your questions deserve answers. Here they are!

What is a home inspection?

A home inspection is an event that is basically exactly what the name implies: A home inspector walks through the home, looking at specific elements and features of the house, and then provides a report about anything that needs to be repaired.

Why would I want a home inspection?

An inspection is a good idea anytime you want a full rundown on any issues or problems with your house. If you’re already living there, it’s a lot less necessary than if you’re buying the home — when you will most definitely want an inspector to check for any potential red flags. They’ll be your problem after closing, and big issues can sometimes affect the insurability of your house (which, in turn, affects your loan eligibility), so home inspections are most common after an offer is made on a house but before the closing finalizes the deal.

What does the home inspector look at?

There are six essential parts of an inspection that you can expect every inspector to hit. They are the roof and attic, the basement and foundation, the plumbing, the electrical setup, the heating or air conditioning systems, the interior of the house, and the exterior of the house.

Depending on where you live and what common problems tend to manifest in the homes, you might also want to think about hiring a pest inspector, a sewer line inspector, or even ask about an engineering report to evaluate the home and plot’s structure and stability.

And in areas where radon is prevalent, or where there’s a lot of humidity, you may also want to ask about radon or mold testing (some home inspectors do this as an add-on part of the package).

How much does it cost?

The price of the home inspection is going to depend on the size of the house. You can typically expect to spend around $300 on a home inspection, but smaller properties (less than 1,000 square feet) might cost only $200, whereas larger homes (more than 2,000 square feet) cost upwards of $400 to inspect. Ask an inspector or a real estate agent in your area what they usually cost to get a closer estimate.

Do you need an inspector for a new house?

It’s always a good idea to get a home inspection — even in a brand-new house. You don’t want to find out there’s a problem after you move in, and an inspection is the best way to figure that out. So follow the “trust, but verify” process with your builder: Trust that they did their very best to get your home in the best condition possible … then verify that they did just that with an official inspection.

Who licenses inspectors?

Home inspectors are licensed by each state, and there are slight differences in how they are certified and how they maintain their license from state to state. Your real estate agent should be able to explain the policies in your state, or point you to where you can find them.

Should you attend the inspection?

It’s usually a smart idea for the buyer to attend the inspection in case they have questions for the inspector or want to follow up on any notes the inspector makes. Many inspectors today use new technologies that allow them to include photos of any issues or potential problems, but there’s nothing like being there in person to better understand exactly what’s wrong and how to fix it.

What happens if a problem is uncovered?

If everything is not in good shape with the home you’re about to buy, there are options. Usually when this happens, the buyers and the sellers start negotiating again — this time, to figure out who’s going to pay for the necessary repairs. Buyers might be able to ask for some money to be knocked off the final sales price to accommodate for the problem, or sellers might decide to go ahead and fix it before closing. If everyone can come to an agreement that suits everybody, then the sale can move forward.

Can you get out of a contract if a problem is revealed?

Most contracts to buy a home have an inspection contingency, which is hugely important for the buyer. The inspection contingency stipulates that the buyer can bow out of the contract if there’s a big problem uncovered by the inspection, which typically motivates sellers to make sure everything is in good shape. So you’re not necessarily locked in for life after you make an offer and it’s accepted; make sure you talk to your agent about inspection contingencies.

In most cases, the inspection contingency in the contract will give you an out if you need it. 

What else does the inspector look at, if anything?

Home inspectors are going to keep an eye out for any modifications to the house that were made since the last time it sold and make sure that the owner filed the appropriate permits to make that modification.

If the inspector finds an unpermitted change or tweak to the house, that could also cause a problem with the deal, so it’s always a good idea to obtain permits for any changes you want to make to your home if they’re necessary in your city or county. That’s not something you want to scramble to do before closing!

Can you use the inspection to negotiate on the sale?

Yes, absolutely! Buyers make their offers on homes with the understanding that there may be some minor problems here and there, but that the home is generally in good enough shape to be sold. So depending on what the inspection uncovers, buyers can either ask for the sellers to fix any problems, or they can request that the sales price of the home be lowered to account for the flaws and tackle the issue whenever they take ownership.

What isn’t included in an inspection? 

Inspectors are good — they catch a lot of problems with homes, and they’re usually locally focused enough to know exactly what to target — but there are some home features and extras that aren’t included in a home inspection. If it’s important for you to get an additional expert on the scene to check something out, it’s better to know upfront.

Home inspectors typically do not look at:

– Termites or pests
– Television antennas or satellite dishes
– Detached structures — garages, sheds, chicken coops, outdoor saunas, and so on
– Well and septic systems
– Lawn sprinkler systems
– Local code compliance
– Kitchen appliances
– Central vacuum systems
– Fire or smoke detectors, or fire suppression systems
– Alarm systems
– Hot tubs or swimming pools
– Environmental hazards (asbestos, lead, or radon, for example)

So if you’re concerned about one or more of those with the potential home sale in your life, you may need to hire one or more additional inspectors to make sure everything is as it should be.

How can an inspection affect your ownership?

The biggest way that an inspection might affect your ownership of the house, apart from negotiations between buyer and seller, is with the homeowners’ insurance. If you have a mortgage loan, then you must have homeowners’ insurance on the house — the lender wants to make sure that the asset is protected. (And even if you don’t have a mortgage loan, it’s usually a good idea to insure your home, anyway.)

Not every homeowners’ insurance company requires a home inspection, but it’s become increasingly common in recent years. If you can’t provide them with a recent inspection that shows no major issues with the house, then you might not be able to secure insurance, and that could be a big deal if you need it for your loan.

Whataburger Can Educate Phoenix Youth!

Whataburger has collaborated with Rainbow Housing Assistance Corporation to form a community partnership at La Palmilla apartments, a 267-unit community in Phoenix.

Whataburger is committed to supplying Phoenix youth with backpacks, scholarship information, job opportunities, and prizes for participants. College Bound, is Whataburger and Rainbow’s most recent event dedicated to helping youth with college admissions and financial aid questions.

The last College Bound event was held on September 16, 2019. Participants received insight on financial assistance, based on family income, to help them understand payment options for college. U.S. Army and U.S. Marine Corps recruiters were also in attendance to answer questions.

Throughout the year, participants are provided with youth enrichment programs, including educational activities, informational resources, and homework help to promote academic achievement and employment opportunities.

Rainbow Housing Assistance Corporation is a nonprofit organization that provides service-enriched housing programs for residents of affordable housing and diverse economic backgrounds throughout the country.

Rainbow is currently providing services to more than 85 affordable housing developments across the country, and is headquartered in Phoenix.

Rainbow also has a number of developments in Arizona, all of which began construction in 2016.

Whataburger will continue to support Rainbow in their mission to help property owners improve occupancy, reduce turn over costs, and enrich the quality of life for the renter. Flynann Janisse, executive director of Rainbow and Dawn Cole, Whataburger’s community experience supervisor, lead this partnership to educate and serve youth. To learn more, please visit https://rainbowhousing.org/.

 

 

The post Whataburger Can Educate Phoenix Youth! appeared first on Arizona REALTOR® Voice.

18 Secrets No One Tells You About Buying A House

Most homeowners aren’t shy about telling you how awesome it is and all about the perks of living in a house that they own … but they’re a lot less forthcoming about the ugly aspects of buying a house and the sacrifices you make.

And yes, there is ugly, and there are sacrifices. Here’s what nobody is telling you that you might need to know about buying a house (especially for the first time).

You don’t need to put 20% down

In most cases and with most lenders, putting 20% down is ideal or even required. But this isn’t always true. For example, the Veterans Administration (VA) offers loans for veterans that don’t require any down payment money at all.

Other loan-backers, like the Federal Housing Administration, will allow loans with only 3.5% down, but buyers have to pay mortgage insurance on those loans. They’re riskier because the buyer has less equity in the home, so buyers can expect to pay a percentage of the loan amount in mortgage insurance over the lifetime of the loan. (Or refinance the loan once they do have at least 20% equity in the home.)

There is down payment assistance available in both loans and grants, so it helps to talk to a real estate professional (like an agent) and see whether they know of any programs that might help you secure more money down.

… But you do need to put any new credit line plans on hold

Your mortgage rate is going to depend in part on your credit score, and your credit score is going to get dinged with every new line of credit you open before buying a home. So to get the very best deal on your mortgage loan (and potentially afford more house), make sure you’re not going crazy with new credit cards right before you start shopping — and definitely don’t buy anything like a yacht or car on credit!

You’re not locked into one particular lender

Some people think they should immediately dive into a relationship with the first lender that accepts them and offers to back their mortgage loan. But here’s the problem with that strategy: There may be a better match out there for you, and if you don’t shop around a little bit, then you aren’t going to find it.

Talk to a few different mortgage brokers and ask them what their best deal is. Your credit won’t get dinged by this, so please feel free to explore your options! 

Your monthly mortgage payment includes more than just the loan payback

Every month, you’ll be paying back your mortgage loan — that much you probably figured. But of course, there’s also the interest on your loan (which under many contracts gets priority for repayment above the loan principal). And you’ll also be paying homeowners insurance, which is required for the lender to approve the loan, plus taxes, every month.

If you’re not sure how much you can afford based on all of this, it’s probably not a bad idea to sit down with a mortgage broker (or five — see above) and talk about your options.

… So the mortgage amount on portals is not necessarily accurate

It’s tempting to look at the “average mortgage amount” on a real estate portal and take it as gospel truth, but often those are based on a loan with 20% down and usually don’t include the insurance or the taxes. Talk to an expert to get a good sense for how much you’ll expect to pay every month.

School districts are important even without kids

If you don’t have kids or don’t plan on having any, then you might be tempted to ignore the school district when shopping for a home — what’s it matter?

School districts definitely could be very important to buyers a few years down the road when they decide to purchase your house. And homes in neighborhoods with good schools tend to appreciate in value faster than homes in neighborhoods where the schools are just so-so. Make sure you’re considering your future as you’re shopping, which includes your future after this home.

You don’t need to spend your entire pre-approval amount on the home

It’s tempting to buy at the very top of your preapproved price range, but remember that you’re going to have to pay interest on the entire amount over many years, and don’t forget about the other costs of owning a home.

Financial experts suggest that you spend no more than 30% of your household income on your mortgage, so if the amount you’re spending is creeping beyond one-third of your household income, that could be tough to meet. So don’t overextend yourself!

You’ll look at homes out of your price range (and crave them)

It’s only human nature to look at things you can’t have, and that goes for housing, too: You will not be able to refrain from looking at homes just above your ideal price range and thinking about how nice it would be to buy that house instead of the disappointment you walked through last week.

But what’s worse than living in a house that you might need to fix up a little bit? Living in a really nice house that you can’t afford and having to sell it — or worse, go through a foreclosure. Look if you must, but don’t let it influence your decision-making.

You may get outbid, more than once

Some markets are hotter than others and have more cash buyers, which can be devastating if you’re using a loan and don’t have the wherewithal to pay cash for a house. Sellers often opt for cash buyers because the closing process is less cumbersome, and it can be hard for buyers to experience bid after bid rejected by the seller.

Stay strong and have faith that your house is out there. It might not be a smooth road, but you will get there.

Agents get paid on commission

Real estate agents typically don’t get paid until the closing table, when the house is officially yours. Then the seller will cut the agent a check. This is because agents are paid on commission: They’re taking a percentage of the sale.

If you have an agent who isn’t upfront with you about how payment works — or worse, one who is trying to talk you into more house than you can really afford — then it’s not a bad idea to question whether your agent is really the best fit for you. You want someone honest who will protect your interests, and that’s not too much to expect from an agent.

Talk to a contractor before closing

The inspector might identify some issues that need to be addressed, and usually this is negotiated with the seller, but to be entirely sure that you understand what will be involved and how much it will cost, it’s a good idea to hire a contractor and go over the inspection report. Some contractors offer free consultations, and most will be able to give you a ballpark figure to use as a jumping-off point for negotiation.

Speaking of closing: Introducing closing costs!

It costs money to close on a house, and closing costs can be picked up by the buyer, the seller, or both. This is usually outlined while negotiating the contract, but if you didn’t pay close attention to those terms, then it might sneak up on you. Clarify with your agent and mortgage broker who is responsible for closing costs and make sure you’ve got the money available if you’re the lucky winner of that responsibility.

Your mortgage will probably be sold to a servicer

After all that time looking for the right mortgage broker and lender, you may feel like it’s destiny, but the reality is that your lender probably doesn’t feel the same. Most lenders sell mortgage loans to a servicing company, which will be the entity collecting your checks every month for the next 30 years (unless the gets sold again, of course).

Be prepared for an announcement that your loan has been sold to a servicer and ready to cancel any checks or payments that slip out the door at the wrong time. It’s unfortunate, but it does happen, and you don’t want to pay your mortgage twice in one month.

Parking isn’t always guaranteed

There may be a space with your condo, and perhaps you have a garage or a driveway, but if you live in a major metro area or have several kids of driving age (or roommates, for that matter), then it’s possible you might have a struggle with finding parking.

This is information that’s usually included in listings, and it might also help to ask agents about parking situations in different neighborhoods. Street parking might work fine, but it’s usually a good idea to know how scarce or ample it is at the very least.

You’ll need to buy furniture

Maybe you’ve bought all of your furniture at antique stores, and it just doesn’t look right in your new mid-century modern home. Or perhaps you have several more rooms to fill than you did before. Whatever the case, be aware that you’ll have some purchases to make on the furniture front, and budget for them if you can — and definitely do not buy a bunch of furniture on credit before the loan closes, whatever you do.

You’re on the hook for any home repairs

The nice thing about renting is that when something breaks, the landlord will theoretically be by to fix it, or send someone, sooner or later. You don’t need to worry about how much the new sump pump or sewer line costs.

But all of that burden becomes yours and yours alone when you become a homeowner. The drain is clogged? The water heater won’t heat water? If you don’t fix it, or arrange for someone else to fix it, then it’s staying clogged and cold.

Those nearby empty lots won’t be empty forever

Everything changes, and some places change more quickly than others. Almost nothing gets a neighborhood riled up like the words “new development” or “strip mall,” and you cannot take it for granted that the rolling (empty) hills around your brand-new pride and joy are going to remain empty, unless you happen to own all the land, too.

It’s not a bad idea to stop in at your city or county offices and ask what they know about any development plans or zoning for the area, and then keep tabs on things once you move in. Better safe than sorry and surprised, right?

It might take a while to feel like “home”

You’d think that once you’ve gone through all of this trouble for a house, it’ll automatically “feel” like yours … but that’s not necessarily true. It may take a few weeks or even months before you start settling in and feeling like a homeowner.

So if the words “this is my house” don’t roll off your tongue quite like they should in the beginning, take heart: You’ll be claiming it without thinking about it before you know it.