The first questions any buyer must ask themselves today are:
1) Can I afford to buy a home?
2) Can I afford to keep and maintain a home?
3) Can I sell the home quickly if I need to?
Can I afford to buy a home?
Before you get into a car with your buyer agent to drive around looking at homes, do yourself a favor and find out how much home you can afford to buy. That means going to a trusted lender and painting an accurate picture for them of all your finances – how much cash you have for a down payment, the extent of your debts, employment – everything! Do you know your credit score? Today there is more to consider when buying a home than simply PITI (Principal, Interest, Taxes and Insurance), but if you keep this in mind you are now free to begin the fun part, looking for your dream home at a price you know you can afford. Your buyer agent can give you a list of lenders to contact and make sure our excellent local banks are on your list. Prices and terms have never been better than right now.
Can I afford to keep and maintain a home?
You found your dream home and the seller has accepted your Offer to Purchase. Buying a home today means you had better plan on keeping it for at least 10 years. This is going to be a very slow and long recovery. This is not an economic environment conducive to quick money making turnovers. This is the time to buy ‘generational properties’.
This is all the more reason you must factor in repairs and maintenance. Big ticket items like roofs, siding, windows, fuel tanks, heating systems and water heaters all have life spans. If the roof is 25 years old you can probably plan on having to replace it within the first 5 years you own the home. If the oil tank is the old single-wall design it needs to go right away.
As part of any Offer to Purchase contract there must be a contingency for a Home Inspection. The inspection will seek to determine the condition of the home construction, its systems and appliances. Ongoing maintenance and replacement expenses need to be factored into any budget so it behooves you to use a good structural inspector and additional specialists if necessary. You want to find out as much as you can about the house before you buy it. If the structural inspection shows significant deficiencies see if you can negotiate concessions with the seller to offset the repairs, or if the onus becomes yours at least get repair estimates to determine if you will have the funds to make the repairs yourself. This way if you won’t have the additional funds, you are still able to reconsider your purchase so you don’t get yourself into a bind.
Can I sell the home quickly if I need to?
Location, Location, Location. The majority of buyers today begin their search for a home on the Internet, but what does the Internet tell you about location, very little. Advertising and marketing is all about selling the sizzle. Even though false advertizing is against the law and also violates the REALTOR® Code of Ethics, we see subtle prevarications all the time. So, don’t believe everything you read about a property on the Internet. Google is not enough. You need to get up and get out and get educated. The purchase you are about to make is too big to have a casual armchair attitude about it.
Martha’s Vineyard is a complex market and one that most buyers know very little about. That is why you want a real estate market expert who will advise you about the area you are considering for your purchase. You want someone who does the research and will give you accurate information. What is good about the area? What is bad about the area? Is there any forecast for change in that area? Knowing about an area will give you a good idea of how easy it would be to sell a home should you have an unexpected emergency?
As I said before, it is going to take years for the real estate market to recover, which is not to say you should not buy a house now, but do your homework and wait for the right house at a price you are comfortable with.
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