What to look for when buying a house: A guide for home buyers

Going house hunting can be exciting. If you’re a first-time home buyer, you may have a lot of questions about how to buy a house.

In this article, we’ll go over ten things to consider when choosing a home to buy so you can feel confident in your decision and avoid regret later.

1. Price

While a home’s purchase price is important, it’s not the whole financial picture. Instead of choosing a house based on price alone, calculate what your monthly mortgage payment will be. Many first-time buyers max out their home budget only to end up “house poor,” where they spend so much of their income on housing that they have little left for anything else.

As you review your finances, consider getting pre-qualified or pre-approved for a mortgage. You can use this calculator from Rocket Mortgage to see how your payments will be amortized over time.

2. Location

Where you buy a home will have a tremendous impact on your day-to-day life. When house shopping, it’s important to find the answers to questions about the house's location, such as:

• Is the house in a flood zone, or do you need flood insurance?
• How safe is the neighborhood?
• What is the school district like?
• How far is it from the airport?
• Does it have access to reliable public transportation?
• Can you hear noise from traffic, airplanes, or businesses?

3. House size

Carefully consider the size and floor plan of every home you tour and whether they measure up to your needs. Some aspects of a home’s size to look at include:

• Square footage
• Overall layout
• Number of bedrooms
• Number of bathrooms
• Living room size
• Whether there’s a garage, basement, or attic
• Yard space

Determine which aspects are essential. Then try finding a home that meets your top requirements. Spend time doing your research to establish whether it meets your basic needs.

4. Property taxes

Property taxes are taxes levied by local governments on the assessed value of real estate. They can be paid directly to the government or by having your lender escrow part of your monthly payment for property taxes. Either way, the property tax rate and the assessed home value can impact how affordable the home is.

5. Homeowners association

A homeowners association (HOA) is a private organization in a residential community that sets rules for its homeowner members, collects fees, and maintains common areas.

Before making an offer on a home in an HOA, find out how much member dues are. Also note that HOA fees tend to increase over time. The HOA costs could be worth it if you value community amenities and standards. If you prefer more control over your home without the costs associated with an HOA, you may want to steer clear.

6. Amenities

Of course, neighborhood amenities can also exist outside of an HOA. For example, many condominiums and planned communities are located near popular amenities such as parks, dining, shopping, and other attractions. Make a list of all the amenities that are most important to you before house shopping.

7. Future resale value

Increases in home value can’t be guaranteed, but buying a home with features popular with homeowners can influence appreciation over time. Factors that can help a home maintain or increase in value include:

• Location or neighborhood. There is an adage in the real estate community: “location, location, location.” If the home is in a vibrant neighborhood with services like shopping, good transportation, and parks, it’s likely the community will continue to be a good place to live, which bodes well for future value.
• Schools. Strong public and private schools in the area will make the property appealing to future home buyers, especially those with young children who often stay in their homes for years.
• Growth. An area with a growing population, business district, and infrastructure typically sees home values rise as well, as an indication that people and businesses want to live and work there.
• Demand. A basic rule of economics is that as demand for a commodity rises, its price will go up. A home in a highly desired neighborhood will see its value go up, sometimes quickly, because houses go on the market less frequently when owners don’t want to leave, and when they do, there are lots of interested buyers.

8. Home condition and age

A home’s condition and age also affect your homeownership costs. The older the home and the poorer its condition, the more (and sooner) you’ll pay for maintenance and repairs. To gauge these costs, hire a reputable home inspector to properly assess the home.

9. Energy efficiency

A home with energy-efficient systems and appliances can lower your utility bills. Think energy-saving HVAC systems, solar panels, and smart thermostats. Research these and similar systems to lock in future savings. 

10. Local zoning laws

Local zoning laws govern how homes in a specific area can be used. For example, local zoning may limit the types of structures you can add to your property or the height of buildings. Before buying a property, check its zoning requirements to ensure you can use it how you want to.

Key things to look out for when buying a house

Here are some physical home features to pay special attention to while home shopping:

Roof

A roof is a major component of a home. You may spend thousands fixing or replacing it if it’s not in good condition. Pay attention to the roof of any home you’re considering. Keep an eye out for issues like broken or missing shingles, leaks, or other signs of roof damage. Because a roof replacement can be costly, it may be wise to avoid buying a home that may need a new roof soon.

Windows

The windows of a home impact overall comfort and energy efficiency. Determine what condition they’re in before you seal the deal. Some issues, like sticky windows, are relatively minor and can be quick fixes. But draftiness and leaks likely point to major problems you’ll want to avoid.

HVAC unit

Verify that the home’s HVAC system is in good shape before signing a mortgage agreement. Apart from having the system looked at during the home inspection, ask the seller a few questions to get a better idea of its condition. You’ll want to find out:

• The age of the heating and cooling systems
• Whether the home has central air or window units
• The primary method of heating the house (i.e., forced air or baseboard heating)
• Fuel source for heat (i.e., natural gas, electricity, propane, etc.)
• If the heating and cooling systems have been regularly serviced

Plumbing

Confirm that your new home’s plumbing system works. Look out for broken or leaking pipes when touring a home. Also, look at the pipe material. Older homes may have galvanized pipes, while newer homes have copper. Even newer homes, or homes with updated plumbing, may have a combination of these.

If you notice significant issues, you may be able to negotiate a better price on the home or ask the seller to make repairs as a condition of the sale. The success of your negotiation may depend on whether it’s a buyer’s market or a seller’s market.

Mold and water damage

Mold and water damage can be a serious problem and health hazard, especially the longer they are left untreated. Typically, they occur due to a water leak or excessive moisture. If a home has mold or water damage, you can request that the seller fix it, renegotiate the price, or walk away from the deal. Whatever you do, don’t buy a home with mold or water damage without a plan to address it.

Foundation issues

The condition of a home’s foundation is critical since every other part of the home is built on top of it. For instance, foundation cracks or settling are major issues that present instant red flags. Plus, many lenders, including government loan lenders, have property standards that won’t allow you to buy a house with foundation issues.

Pest infections

Pest infections are another red flag to watch for. Get a professional pest inspection to ensure the home is free of termites and other pests. If left unaddressed, these issues could impact your ability to qualify for a government-backed loan.

The bottom line: Knowledge is power when house shopping

By understanding what to look for in a home, you can avoid costly mistakes and find a property that fits your needs and budget. The ten factors we’ve covered, along with physical features to inspect, give you a roadmap for evaluating any home you come across.

If you’re ready to start touring homes, you can get preapproved for a loan with Rocket Mortgage. Knowing exactly what you can afford and having a preapproval letter in hand will strengthen your offer and help you shop smarter.