I recently sat down with my sister, Leanne Mitchell, a local Realtor, to discuss what to know before buying a home in Massachusetts. This article shares her experience and my recent experience buying a new home.
It’s a challenging real estate market, to say the least. Homes in eastern Massachusetts get multiple offers and sell quickly. How do you balance the need to make a competitive offer with the need to do your due diligence? Having recently gone through the home purchase process, I wanted to share some thoughts from a home renovation perspective.
How Can a Buyer Protect Themselves in a Seller’s Market?
If you find a home you love, you want to make the most attractive offer possible. But that doesn’t mean you should not do everything you can to learn about the condition of the home. Some things are easy to spot: whether the kitchen and bathrooms have been renovated recently, or the condition of flooring. But what about what is hiding behind the walls?
Prior to the Act Protecting Consumer Rights in Purchasing Safe and Habitable Homes, buyers may have felt pressure to waive inspections to make an offer more attractive to the seller. Now inspections are not impeded in this way, giving you as a buyer the opportunity to gather more information once your offer is accepted and you move toward settlement.
It’s a matter of knowing what you are getting into. Waiving inspections is not ideal, so removing that advantage to sellers has been beneficial for home buyers. But even before the inspection, there are things you can look for as you walk through properties and decide whether or not to make an offer.
6 Things to Be Aware of When Purchasing an Existing Home
In a competitive market, buying a home that needs work so it works for you can be a good move. But you need to look at the property with eyes wide open. Don’t get discouraged, but don’t overlook items that are potential deal-breakers. The problem that people face regardless of whether it is a buyer’s or seller’s market is rushing to a decision based on an emotional attachment to a house. That’s when problems get overlooked. A few basic tips:
- Be patient
- Make a list of needs and wants
- Don’t buy because of stress or anxiety
Especially if you have been looking for a home and have had offers rejected one or more times, it can become discouraging. To help you through the process, here are six things to consider when looking at a potential home purchase.
1) What is Unchangeable:
The first way to get a sense of whether this is a house you are interested in is to assess the major factors true about any real estate. Is the location desirable to you–near schools, work, friends and family? Is the amount of land that comes with the house enough to meet your needs? Are there major repairs or remodeling that do not fit into your budget? If any of these factors are off, it may not be the right house for you.
2) Pride of Ownership:
In our recent home purchase, the prior homeowners pride in ownership was evident. The home and the landscape was well manicured. The siding had been updated, the windows were new. There was proper insulation for energy savings. It is easy for homeowners to let this kind of maintenance go until “next year” and then the next. Seeing that care was taken, even if everything is not brand new, is an indication that what is behind the walls was likely cared for too.
3) Consider a Home Warranty:
To avoid large and unexpected repair or maintenance bills in the first few years in a new home, a home warranty can be helpful. This can be worthwhile especially if your real estate agent or the seller offers this as part of the sale. Be aware of the limitations–not everything is covered–but a home warranty can be a helpful safeguard in the “buyer beware” world of real estate.
4) Research the Real Cost of Renovation:
There is a lot of false information floating out there, online especially. If you see or hear that a kitchen remodel will cost an amount that seems impossibly low for this region, you are probably right.
5) Your Realtor Can be a Wealth of Knowledge:
Look for a real estate agent who is knowledgeable about the cost of construction in your area. They will have a referral network of remodelers and tradespeople who can help make needed changes to the home. Having a “black book” of trusted professions is incredibly helpful in the first years of owning a home.
6) Neighborhood Research:
Before setting up a walkthrough or attending an open house, research school systems, commute times, and other local amenities that are important to you.
7) Pay Attention to Red Flags:
A home inspection will give you more detail, but before even putting an offer in, pay attention to red flags. How old is the water heater or HVAC system? Does it look like it has had proper maintenance over the years? Are there signs of water infiltration? What does the foundation look like? Massachusetts is a buyer beware state which means they must do their due diligence. Sellers have to be truthful in the seller’s disclosure document, but due diligence is crucial.
All of these things should be considered in a home purchase decision. If none or only a few of these boxes are checked, the home could become more expensive after the purchase. You don’t want necessary repairs or renovation costs to be a surprise after settlement.
As a buyer, consider the initial rate of return (IRR) on the home. Calculate how much overhead you will have with the home after you buy it. By having a sense not just of mortgage payment but upkeep and potential remodeling costs, you will know how to make an offer that makes sense for you. The emotion of buying the home wears off – then it’s time to get to work fixing and maintaining the property.
Going into the process with a sense of your non-negotiables, along with a knowledge of what to look for and questions to ask as you tour properties, will help you make the right decision and hopefully land the winning offer.
Closing Thoughts
Whether you plan to purchase a home or stay where you are and renovate, it is important to understand the value of your home and your buying power in today’s market. If you are looking to improve your property, consider speaking to Mitchell Construction. We’ll provide you with the best solutions for the best use of space, beautifully designed. Plus, we’ll advise you on how to get the best value now and for potential resale in the future.
To learn more about the home renovation process, please read our eBook, “The Homeowner’s Guide to Creating the Dream Home You’ll Love.” And if you are ready to speak about your next renovation, please schedule a home renovation discovery session.
Leave a comment