Financial Literacy for Everyone

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You may not find your dream home right away. According to the National Association of Realtors, it takes an average of 10 weeks for homebuyers to find exactly what they're looking for. When you're deciding what type of home is right for you, it's helpful to think long-term. Try to ensure that the home you buy is suited to your current needs as well as your future plans. It's also worth thinking about how the home you want to buy can be resold later or serve as a source of income in the future. The home you buy now doesn't have to be your dream home for life, but it should suit your immediate needs with an eye towards future needs.

Choosing the Right Home

Types of Properties

  • Houses – If you're searching for privacy and independence, buying a single-family residence might be the right choice for you. Decide whether you want a new home, a previously owned home or a fixer-upper. If you buy a newly built home, consider the cost of potential upgrades and landscaping, which aren't usually included in the base price. You might be better off with a previously owned home in good repair. A fixer-upper, on the other hand, may allow you to purchase more home for your money. Your house will quickly increase in value as you put work into it – as long as you're willing to invest the time and money required to do the job right.
  • Condominiums – A condominium is similar to both an apartment and a house. You own the condominium unit you live in, but you pay maintenance fees every month for cutting of the grass, trimming of hedges, painting shutters and other upkeep. However, you're still responsible for interior repairs and maintenance. The homeowners' agreement will outline what is and isn't allowed on the property.
  • Co-ops – Housing cooperatives, or co-ops, are more common in larger cities and they're becoming increasingly popular. The ownership structure of a co-op involves a co-op board, made up of all or a select group of residents, who must approve potential co-op members. This group structure is mainly what distinguishes co-ops from other types of properties.

Aside from assessing the type of home you want to purchase, you can also explore options by researching home sale inventory statistics. The National Association of Realtors publishes a monthly report detailing how many homes are for sale in the top 200 U.S. cities, how long the homes have been on the market and the median asking prices. You can use this report to compare your local housing market to the national average. It's helpful to consider how long houses in your area have been on the market, which can indicate whether you're entering a "seller's market" or a "buyer's market." A seller's market means home buying may be more competitive, whereas a buyer's market will work in your favor with more affordable prices on the market. Also consider other factors like local schools, tax rates for different areas and even how the location might affect your work commute.

Use real estate websites to see rough estimates of individual property values. They provide valuable information including nearby schools and tax rates. A real estate agent can provide you with a comparative market analysis (CMA) that shows the value of similar houses in the area, which can be helpful as you decide what your offer should be. When you finally make your offer for a home, your research may pay off by helping you negotiate a better deal.

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