Should I Rent or Buy A Home? | Calculators by CalcXML

Should I Rent or Buy A Home? | Calculators by CalcXML

Wait! Are You Buying the Right House?

Don't let your emotions overrule a reasonable assessment of whether a particular home really meets your needs.

By Marcie Geffner

Anyone who has ever bought a home remembers the wonderful feeling of finding the right property and falling in love with it. It's an indescribable mixture of comfort, excitement and dreams about to come true. "Can we afford it? Will the sellers accept our offer? How soon can we pick up the keys?" the excited buyers ask. Great vibes are undoubtedly a good sign in deciding to purchase a home. But you shouldn't let your emotions overrule a reasonable assessment of whether a particular home really meets your needs.

Here are a few of the many rational questions you'll want to ask yourself before you rush into a commitment to buy.

PriceYour lender says you can afford to buy the home you adore, but are you comfortable with the monthly payments you'll be obligated to make? Is the down payment within your means? Will you have enough cash to pay transaction costs and moving expenses? If the house needs major repairs, remodeling or redecorating can you save the necessary funds within a reasonable time period?

Condition
Along with price, the condition of the home should be a top consideration. Does the home need a new roof? Extensive upgrading of the electrical wiring? New plumbing? Is the home disaster-ready (e.g., bolted to the foundation in earthquake country)? A fixer-upper home with lots of potential can be a great find or a money pit. Will you be able to meet the financial challenges and live with the mess and inconvenience while the home is being brought up to your expectations?

Size and configurationIs the house the right size for your needs and does it have the right combination of bedrooms, bathrooms and other living areas? Is that small closetless den really big enough for your child's bedroom? Is one bathroom adequate and if not, what are the real costs and headaches of adding a second one? Does the kitchen have enough cupboard and countertop space? Is the garage wide enough and deep enough for your vehicles? Will your piano really fit in that alcove near the staircase?

Comfort 
Does the house have a central heating system? A central air-conditioning system? Are those climate controls important to you? Are the windows large enough and positioned to create cross ventilation? If the house has two stories, are you comfortable with the idea of walking up and down stairs every day? Is there a downstairs bathroom (and bedroom, if needed) for guests who can't navigate the stairs?

Style 
Is the design and architecture of the house too modern or too traditional for your preferences in furniture and home furnishings?

Resale potentialPeople move to a new home every seven years, on average. If you wanted to sell your home or were forced by unexpected circumstances to sell it, how easy would it be to find a ready, willing and able buyer?

FeaturesSome buyers fall in love with pricey home amenities that seem attractive and desirable at the time, but later prove to be more headache and less pleasure than the buyers anticipated. Do you really want a swimming pool? High-maintenance ornamental trees? Commercial-grade built-in kitchen appliances? Expensive hardwood floors? Some homes are easier to visit than they are to own.

How Fast Should You Buy a Home?

In hot markets across the country, homes are selling fast. And that means if you hope to buy a home, you have to be prepared to move quickly.

"I've seen all cash offers close in three days," says Realtor.com's Consumer Housing Specialist Leslie Piper. "And I've seen loans get approved and close within 21-25 days."

Forty-seven percent of all homes sold in June 2013 were on the market for less than a month, according to the National Association of Realtors. It also reports that the median time on market for all homes was 37 days in June. Short sales were on the market for a median of 68 days, while foreclosures typically sold in 39 days and non-distressed homes took 35 days.

If you don't have cash to buy a home, it's critical that you get pre-approved for a mortgage. "Prior to starting your house hunt, you give your lender all of your financials," says Scott Sheldon, a loan officer with Sonoma County Mortgages. "You let them pull a copy of your credit report, run your debt ratios … and you go house hunting knowing you are ready to roll."

Once your offer on the home is accepted, be prepared to be at your loan officer's beck and call. "If you are diligent about providing the lender everything they request, you should be able to close in 25 days or less provided the real estate agent title company and everyone is diligent about meeting contractual time frames," Sheldon adds.

Barriers to Speedy Homebuying

Piper warns that if deadlines can't be met, you can lose the home. "We are seeing a lot of back-up offers so if someone overpromises but underperforms things can fall out of escrow."

Searching for the right home to buy might take a little longer.

According to an annual survey by the National Association of Realtors, the typical buyer searched for a home for a median 12 weeks and visited 10 homes, down from 12 homes in the previous year's survey.

It helps to find a real estate professional you can trust to help you in your search. "That person is going to be your eyes and ears and tell you what is going on," says Piper. In addition to providing profiles on real estate professionals, Realtor.com offers free mobile apps with information about millions of homes for sale, and includes the ability to search within a particular school district.

Also be sure to scout out neighborhoods where you'd like to live so you are prepared to make an offer when a home you like becomes available. "Most buyers are choosing a (home) based on the neighborhood," says Walter Molony, spokesman for National Association of Realtors. "They want to be close to work or close to family and friends. If you are an entry level buyer you want to make sure you understand that neighborhood. Try it in rush hour. Get a crime report if you don't have first-hand knowledge. Check out schools if you are a family with children."

Tips to Buy a Home Fast

• Check your credit reports and your credit score before you start shopping for a home to give yourself time to fix any mistakes you find. You can check your credit reports for free once a year from each of the three major credit reporting agencies.
• Get preapproved — not just prequalified — for a mortgage. Doing so may even put you at an advantage over a cash buyer who may be offering less money.
• Work with real estate and mortgage professionals who have a track record of meeting deadlines. Don't be afraid to ask for references.
• Protect yourself. No matter how much you love the home, make your offer contingent upon a satisfactory home inspection, so you aren't stuck with a house with unknown problems, suggests Molony.