Historically, advice on buying a home hasn’t changed much. We’ve all heard that you shouldn’t buy the biggest home on the block and that you should come to the table with the largest down payment you can muster. But in our changing world, what should buyers consider when searching for a new home? Here, we share our top tips for modern home buyers.
Many buyers check to make sure that the home is wired for cable and Internet and that the nearest cell tower is providing good mobile phone service. Of course, if the home is a knockout, you likely won’t nix the deal, but it’s nice to know if you’ll need to re-wire or switch phone carriers before moving into your new abode.
Create a smart home
Next, many buyers want to connect their home to the “Internet of Things,” that is, to connect their home’s systems, appliances and technologies so they can easily control them from their mobile devices. The most common example of this is the Nest thermostat, which becomes intelligent to your living habits over time and turns itself down when you’re away. Nest also recently partnered with Dropcam, a live-streaming service, to provide a full smart home service that includes smoke and carbon monoxide detection.
The Rachio smart sprinkler system is another way to keep your utility bills down. Rachio measures weather conditions in your region and makes sure your lawn is watered only as much as it needs to stay lush and green.
While devices like Nest and Rachio help you save money, many other smart home products are designed with convenience and safety in mind. For example, products like Ascend and LiftMaster open and close your garage door from your smartphone, allowing you to let in guests when you’re not around or to double check that your home is secure even after you get to work. Similarly, the August Smart Lock detects when you (or approved guests) are approaching and unlocks your front door. That’s right, you can finally carry all seven grocery bags into your home at once. Plus, August’s customization options mean you can give 24/7 access to your world-traveler brother who shows up unannounced but only let your contractor in when you have a set appointment.
Last, a product for those of us who aren’t morning people: The Mr. Coffee Smart Coffeemaker brews coffee on demand from your smartphone in just eight minutes. While you can set up a brew time in advance, just think of the power you’ll feel when you hit “brew,” then “snooze,” allowing a few more minutes of sleep and the promise of a fresh cup of joe when you finally arise.
Remember, if you control security systems or smart appliances with your mobile phone, you need to be sure the device is protected against hackers. Add a pass code to your phone, and download an app that will remotely erase data if your phone is lost or stolen.
Know the “not-so-hidden costs” of ownership
Monthly bills from utilities can affect your purchasing power, so remember to ask the current seller to share their average costs for water, trash removal and average bills for heating and cooling the home during our extreme Midwestern seasons. Plus, keep in mind that you could have to replace expensive systems like your furnace, water heater or soft water system, or pay for upkeep like a new roof. Ask the sellers for information on the last upgrades or system replacements, so you can foresee upcoming costs.
Often, buyers think about a long commute in terms of time, but not in terms of money. When home searching, be sure to calculate the average miles per gallon your car gets, then determine the daily cost of commuting from various areas. Remember, living closer to the city may be more expensive, but small families could downsize to one car and commute via public transportation. Conversely, living farther out could mean a lower monthly mortgage payment but a higher car payment if you upgrade to a newer vehicle with better gas mileage.
Avoid big purchases
Speaking of buying a new car, it’s best not to do that (or make any large purchases) until after you have closed on your new home. Your mortgage approval is dependent on your credit and finances, and any large recent purchases could hurt your chances of being taken seriously by your lender. Think of your home as your next big purchase, and save the dream vacation, new car, boat and riding lawn mower for after you’ve unpacked your boxes.
Understand your credit score
As stated above, your credit score is important when applying for a mortgage. The easiest way to keep your credit score high is to pay your bills on time, as 35 percent of your credit score is dependent on bill payment history. Currently, the Federal Housing Administration requires a credit score of 640 or higher to secure a loan.
Know your rate
During the preapproval process, your lender will provide you an estimated loan amount, as well as your estimated loan interest rate, should mortgage interest rates hold. It is important to review the best loan product and interest rate for you, so you can fully understand your buying power.
Keep in mind that while today’s rates are still historically low, many experts believe that rates will rise in 2015. You can always check the daily mortgage rates to see if interest rates are fluctuating.
Whether you’re looking for an ultra-connected home you can monitor from afar, or a place where you can paint the walls magenta on a whim, we can help. Reach out today to get connected with one of Edina Realty’s 2,300 local market experts.
To start your search, download the Edina Realty Home Search app, which includes every active available listing in Minneapolis and western Wisconsin.