The United States real estate industry is still on fire. Sales of single-family homes increased in July despite inventory concerns.

The median home price has increased by over 18% since last year. It is now more than $390,000 for the average home.

Even inventory woes are being rectified as builders are ramping up new construction. Interest rates remain near record lows, and it is a great time to capitalize.

Buying a family home is a major milestone and investment in your life. Read on for a family home real estate guide. Explore tips for purchasing a new family home that is certain to make your experience a success.

Benefits of Buying

Before you start looking for houses, it is important to understand why you are buying. House prices are sky high right now, and some people may try to convince you to stay on the sidelines.

However, there are a number of reasons to dive in. There are no indications that the real estate market is slowing up. Ownership allows you to grow your net worth in parallel to home prices.

While prices are going up, you are paying down the mortgage principal each month. This means your equity stake in the home is growing with each payment. Add in the natural price appreciation, and your home quickly becomes a financial asset.

Also, there are a number of tax benefits to owning a home. You can use mortgage interest and property taxes as deductions on your federal income tax filing.

Near record-low interest rates is another reason to buy right now. The cost of borrowing money has never been lower. You can lock in a low, fixed interest rate that makes your monthly mortgage payment as cheap as possible.

Save Up

Now that you are ready, it is time to start saving up for your new home. Almost all homebuyers are required to put down a significant down payment. The lender requires this in order to grant approval for a new mortgage.

For example, the Federal Housing Administration (FHA) requires a minimum of 3.5% down to guarantee a mortgage. Conventional loans often require up to 20%.

With home prices soaring to record highs, this places a greater financial burden on home buyers. Your down payment responsibility is growing in parallel to home prices.

There are many other expenses to pay for as well. Expenses such as home inspection or professional movers are paid out-of-pocket. You will need ample cash reserves to move into a new home.

Mortgage Pre-Approval and Personal Budgeting

Many first-time homebuyers confuse the mortgage pre-approval process with their own personal budget for a home; however, they are two very different things.

Mortgage pre-approval is a process you go through with a potential lender before house shopping. The lender runs your credit history and evaluates your income. They also analyze your debt-to-income ratio.

The end result is a letter with a conditional budget for home shopping. The mortgage pre-approval letter is not formal and does not mean you are landing a mortgage. The mortgage approval stage occurs after your offer is accepted and the lender follows their complete underwriting process.

Mortgage pre-approval gives the real estate agent a financial figure to use in their search efforts. It also shows prospective sellers that your offer can be taken seriously.

Just because the lender grants a mortgage pre-approval amount does not mean that you should pursue it. You have to evaluate your own personal budget as well. There are many other costs that go into a real estate purchase.

For example, the mortgage pre-approval amount may not take property taxes and home insurance into consideration. If you are shopping near the water, flood insurance may be a requirement.

There are also other expenses to consider on a monthly basis. If you are upgrading to a larger home, you should account for higher utility bills. Your electricity and heating bills are definitely going to rise in a larger home.

Your new home may have a swimming pool in the backyard. Have you considered the monthly costs to operate and maintain your new pool?

All potential costs need evaluation before giving your real estate agent a price range. Make sure to build in a contingency budget in the event that you underestimate your monthly obligations at the new house.

Act Aggressively

United States real estate is firmly a seller’s market at the moment. Existing single-family homes are moving faster than ever before. In fact, the average home is listed for just 11 days. It is not uncommon for a seller in today’s market to find a buyer on Day One.

This means that it is imperative for you to act aggressively. You will need to schedule a showing immediately upon seeing a new house listing.

There are now virtual showings to speed up the visitation process even further. If you find a new family home that you love, do not delay in making an offer.

Acting aggressively is more than arranging a quick showing and putting in a fast offer. You also need to make a strong offer worth considering. The days of underbidding are over.

In most cases, sellers are accepting offers above and beyond the list price. Bidding wars are increasingly common in today’s market conditions.

In order to land your dream home, making a competitive offer is crucial. You will not have a second chance to come off a low offer.

Grow Into Your Home

If you are looking for a new family home, it is important to consider the future. Consider that you are currently a family of four. You decide to get a new house with three bedrooms and two bathrooms.

Shortly after moving in, you find out that baby number three is on the way. Now, your house is potentially undersized and you have children sharing rooms.

So long as it fits into your budget, make sure to find a home that you can grow into. This way, you do not have to sell an undersized home shortly after acquiring it.

This philosophy is about more than the home size. The size of your property is equally important to a growing family. Families typically want more open land so that their children can run around and play.

Buy the Location

When starting a family, home location is one of the most important factors. There are so many elements to consider for your family’s success.

For instance, you should conduct research on the school system. Find out about its ratings, teacher-to-student ratios, and standardized test performance.

Local crime is another factor to take under consideration. Is this a safe area to raise a family? There is public data on all types of crime including burglaries and violent crime.

There may be other things you are looking for in a location. Perhaps public parks or church access are important. Whatever it is, make sure to put in the research before making an offer.

Home Inspection

The home inspection is one of the most important milestones for a new family home. You do not want to move into a house with a host of issues. Unresolved issues eventually put a financial burden on your personal budget.

After you receive the home inspection report, you can request that the existing homeowner repair these items. If they choose not to, you can ask for financial consideration instead.

With the market firmly in the seller’s corner, you may want to express caution with pushing too hard on repairs. Many homeowners are selling in as-is condition.

They are willing to walk away from a deal if the buyer pushes too hard. In their opinion, they can tap into the demand for single-family homes and find another buyer quickly.

The bottom line is that it does not hurt to ask for repairs and financial consideration after the home inspection; however, you may have to accept these findings if the homeowner is unwilling to repair them.

Storage Space

Having a large family typically means you are going to have a lot of stuff. Where are you going to store everything in your new home?

Storage space is an underrated feature when it comes to a large family. You want to buy a home with a basement or garage to put all your items. In the backyard, a storage shed is another beneficial feature.

Oversized closets also come in handy for a growing family. Walk-in closets are practical and popular in the real estate market.

In the kitchen, take careful consideration of the cabinet space. Also, is there a pantry for food and beverage storage? Lastly, take note of linen, coats, and other closet types. All of these storage options are useful for a family.

Top Tips for Buying a New Family Home

You are now ready to buy a new home. This is an exciting time, finding a forever home with your growing family!

Taking steps like setting a personal budget and researching the location go a long way. Other tips like saving up for a down payment and acting aggressively will help you find success during home shopping.

If you need help finding the perfect family home, contact us today to schedule an appointment.