Buying real estate, whether you are looking for an investment property or a place to live, is a major financial commitment. Before you start signing a purchase agreement, there is a checklist of criteria that you should consider before buying the vacant lot or your new home. Knowing what to look for when you are buying real estate can help you save money and identify any possible problems with the property, such as zoning issues or cracks in a building foundation.
Property Issues - When you are getting ready to buy a vacant plot of land or a home, you should hire a survey company to look for potential property issues, according to real estate expert C.J. Hughes writing on the This Old House website. If the home was built 100 years ago, then a new land survey may show that the house sits outside the property lines. In this case, an addendum to the title insurance may be necessary before closing, or you may have to offer to buy the portion of land that the house sits on. Have a complete survey done to make sure that there are no buried tanks that may have to be removed before the property can be sold. If you intend on opening a business in your home, then be sure that the property is zoned for that before you sign the sales agreement.
Location - Make sure that the real estate you are looking at is located close to the things you will need in your daily life. If you are raising children, then you will want to be near good schools. If it is important for you to be close to a police station and a hospital, then only look at properties within a mile or two of those facilities. Other considerations such as the proximity of shopping, nightlife and access to major roads should also be considered.
Structural Features - When you get a home inspection done, the report will come back with the areas of the house that need to be repaired or installed before the home will pass an inspection from the mortgage company. Some of the more important structural features to pay attention to in a home inspection are the roof and the foundation. A roof in need of repair or replacement can be a major expense, and it would be best to have it repaired by the current owner before you agree to purchase. The same goes for the foundation. A cracked foundation can be an extremely involved and expensive repair that you should have the current owners take care of.
Taxes and Insurance - Property taxes are an important part of the real estate buying process and need to be considered before buying a property. If you are considering an escrow account which is an arrangement with the mortgage company to have it collect your taxes and insurance and pay them for you, then that will raise your monthly mortgage payment. You may also have to pay into an initial escrow account at closing as well. Call the local tax assessor's office to find out the approximate tax burden on a property, and get an insurance estimate from your insurance agent, before committing to buying a property.