Buying a Home
You may notice there's no search tool for houses on our website. That's because, as a boutique real estate firm, Serendipity Realty offers a highly personalized buying experience to our clients. We want to eliminate as much stress as possible for the buyer, and that includes sifting through incomplete listings with out of date information.
Instead, we want you to put your energy into visualizing your ideal home, and feeling prepared for the process of making such a considerable investment. Before you contact us, feel free to read up on homebuying below to get an overview of what to expect.
First-time Homebuyers: Where to Begin
Buying a home for the first time can be overwhelming. Working with an experienced realt estate agent can make the process much easier.
The first step for first-time homebuyers is to do some financial housekeeping, starting with an honest assessment of your finances. Your current monthly expenses and income for the foreseeable future will determine your budget for your mortgage, taxes, insurance, and saving for home repairs. Your agent will work with you based on your budget to determine how much house you can afford.
Prequalification is the first step to take before you begin shopping around. A mortgage lender - preferably one you've been referred to by someone you trust - will run a check to determine your creditworthiness based on your credit score and overall financial health.
Once you're pre-approved for a mortgage and have a budget in mind, you can start the search in earnest for your home. One useful exercise is to come up with three lists of your needs for your home: "must haves", "would be nice to haves", and "dealbreakers". Start with the basics, and work your way up, e.g. "must have at least 3 bedrooms", "would be nice to live near a park", "cannot be close to a highway".
When you find a home you like, your agent will discuss making a bid with you before actually putting in an offer. This way, you'll have a clear idea of how much this home will actually cost to purchase and own. This is also the time to give consideration to whether or not this is the home you want to invest in.
While time is of the essence when putting in an offer on a home, you want to be sure that factors you prefer, like its location, aren't offset completely by possible drawbacks like age or condition. As both a real estate firm and property management firm, Serendipity Realty can guide you away from "problem houses" given our experience with investment properties and home renovations. If you've found the house you love, and your offer is accepted, you're under contract!
While you're under contract, you'll go through a series of walk-throughs and inspections to ensure the house is in the condition you're expecting. This is when you have the chance to request repairs to be made before the closing date, when you will sign the paperwork to purchase your home. Until your closing date, you'll also be finalizing your finances with your selected lender. Negotiating the terms of the contract while getting your finances in order can be a stressful time for anyone new to the process, but with your broker's knowledgeability and guidance, you can get through it smoothly.
How Much House Can You Afford?
The good news about calculating your home budget is that you will likely have more flexibility with your budget and resources than you're expecting. While there are some solid rules of thumb for determining your budget and eligibility, lenders offer different mortgage products that enable buyers to find the right mortgage for them. In other words, you don't necessarily need a 20% - or even 10% - down payment to find a mortgage payment to suit your monthly budget.
Most people can afford homes that are 2.5-3 times their annual income. So a buyer earning $100,000 a year can likely afford a home in the $250,000-$300,000 range. That being said, many considerations besides your income and available assets for down payment are taken when assessing buyers.
Your debt-to-income ratio is a large factor in mortgage eligiblity, as well as mortgage payment calculation. Most lenders welcome buyers who spend less than 40% of their net income on debt. This includes car payments, student loans, and consumer debt like credit cards.
While your income and debt determine your total borrowing power, your monthly payment and best mortgage product for your needs are determined by your down payment. The lower your down payment, the more your monthly mortgage payment will be. Putting less than 10% down on your home often results paying Primary Mortgage Insurance (PMI), too, which is added as a monthly payment.
Mortgage calculator tools like this one can offer a good rough idea of what you can realistically afford.
Making big financial decisions like purchasing a home aren't just done by the numbers: you need to go with what works for you. Consider how much home you can afford, compared to what you want to afford. You may be qualified for a $350,000 home, but it's perfectly fine to spend a little less and have a lower mortgage if that works better for you.
The Right Neighborhood for You
There's a reason "location, location, location" is one of real estate's most popular clichés. Perhaps more than any other feature, the location of your home will be one of the most important factors when deciding which home to buy.
When picking the right area for you, take into account:
Your / Your partner's commute
Neighbors and surrounding properties
Activity level of local Neighborhood Organization or Homeowner's Association
Public transit systems and proximity to highways
Public spaces (parks, pools)
Safety / Crime
Nearest healthcare providers and hospitals
Amenities such as shopping, restaurants, gyms, etc.
Finding a Home That Fits Your Needs
Besides price and location, a house's features should weigh signicantly when finding the right fit. Many people find shopping for a home exciting, and it can be fun imagining yourself in your new space. And it is fun - you should enjoy this part of the process!
As you look for your next home, remember that flexibility is key: it's rare to find a house that meets absolutely every item on your wish list. However, be careful when looking around to remember the true needs that your lifestyle demands of your home.
Here are some questions to ask yourself as you look at prospective houses:
Are the rooms large enough for their intended use? Will you need to buy different furniture to make their size and layout work?
If you work from home, can you easily adapt a room or space for a home office?
Does the kitchen suit your needs in terms of storage and counter space?
Does the amount of yard appeal to or overwhelm you? Can you see yourself
maintaining the amount of property you'd be buying?
If you have hobbies - crafting, kayaking, collectibles - does the house offer enough work and/or storage space for your to pursue them?
How is the house's overall storage? Are there enough closets, and do they have enough space? Do you need a garage?
If the house needs a significant amount of repairs, do you have the time and money to address them?
Serendipity Realty currently owns and oversees four multi-unit properties around Atlanta. If you're eager to invest in rentals rather than a residence of your own, we can certainly work with you and use our expertise to find the right property.
If you're ready for it, real estate can be a great investment - after all, they're not making land anymore. Being a landlord or property manager, however, takes time, money, and sometimes elbow grease.
For those reasons, we advise first-time investors to start small and simple: for example, a single-unit residence near their own home. Atlanta is a constantly growing city with a strong rental market. It's tempting to buy as much as you can afford, but it's important to invest in what you can feasibly manage.
When you're looking at rental properties, you'll be presented with many options: living in an owner-occupied rental, operating singel or mulit-family properties, spending more on a ready-to-rent versus fixer upper, buying tenant-occupied properties.