Choosing a future home for your family or yourself is no small feat, and the act itself can be an overwhelming task. There are numerous questions to answer – types of homes out there, do you need an apartment or a house, what’s a great location, and so on. Then come the financial considerations, which are a labyrinth all for themselves.
For instance, U.S. home prices rose by about 4.3% year-over-year by mid-2024, a significant drop from the double-digit increases seen in prior years. Experts predict a modest price rise of around 2.2% by mid-2025, reflecting a cooler but still competitive market.
Mortgage rates remain a key factor, with current rates hovering around 6.3%, and they are expected to gradually decrease as inflation subsides. This may present an opportunity for buyers to lock in more favorable rates later in the year.
Despite high rates and housing affordability challenges, inventory levels have increased, up by 35% year-over-year, offering more options for prospective buyers.
The Importance of Research When Buying a Home
What is the answer we propose to the certain stress of choosing a home? Well, it’s thorough research and there’s no way around it. Conducting thorough research is your ticket to making a decision about a home that will last you for a long time.
Remember, it’s not every day that you buy a home so you should think at least twice. The real estate market can be a complex maze to navigate, with property types and pricing structures plenty. Do not hesitate to take your time to explore your options. That way you will ensure you avoid unforeseen pitfalls and find a property that fits your needs.
From understanding house and land packages to evaluating custom builds or existing homes, a comprehensive investigation can save you time, money, and stress. Below are some crucial property options and what you need to know about each before committing to a purchase.
House and Land Packages
House and land packages are an option that has been growing in popularity, especially so among first-time buyers. These packages combine the purchase of land with the construction of a new home, offering several benefits rarely seen before.
First, they tend to be more affordable compared to buying an established home. This is because buyers often only pay stamp duty on the land portion if construction hasn’t commenced, saving thousands of dollars on taxes.
Additionally, these packages come with a streamlined process. Buyers deal with one developer and builder from start to finish, making it easier to navigate through contracts, approvals, and construction. Most developers offer a fixed price for the entire package, which can help you avoid unexpected costs during construction.
The flexibility is another attractive aspect. Buyers can work with the builder to select specific finishes, layouts, and design elements that suit their needs – provided, of course, you’ve researched them beforehand. This option allows for more personalized homes without the hassle of a full custom-build.
Finally, house and land packages are usually located in growing neighborhoods, which could mean significant capital growth as the area develops.
However, buyers should ensure they research the developer’s reputation, the area’s future growth potential, and the package’s overall value before making a decision.
Buying Off-The-Plan Properties
Purchasing an off-the-plan property is the process of buying a home or an apartment in construction. Basically, you purchase it before it’s done and then you wait for it to be completed. In so doing you would be partly an investor of the property, but more in function than in name.
Not only could you get your home this way, but you can only make money. Property values in some regions tend to increase during the construction phase, and you can later sell your home.
The US government also offers incentives such as grants or stamp duty concessions, which can make the purchase even more affordable.
One of the major benefits of buying off-the-plan is that buyers can lock in the price of the property at market value on the day of the signing of the contract. Should the price rise you’ll end up making a pretty penny.
There is a downside and it includes the waiting period for the property to be completed. That can take months, or in some cases, years. Other than that, there’s always a risk that the market could shift, leaving buyers with a home worth less than they paid for in the first place.
One thing to pay attention to is the builder’s track record. Delays in construction or issues with the final build quality are not uncommon. However, you’ll want to make sure you’re protected with a strong contract.
Custom Built Homes
Here is an option that gives you complete control over the design and construction process of your future home.
This can be both appealing for those with specific needs or preferences or daunting for those less interested in those areas.
We advise that you do not attempt this unless you’re interested, or at the very least someone in your household is. You’ll need to find suitable land, hire an architect, and choose a reliable builder. Each of these steps can be a challenge and a half and delays are very common.
The main reason for opting for a custom build is that you have the complete freedom to create a space just how you imagined it. You can choose every aspect of the home, from its layout to its finishes, ensuring it reflects your tastes.
On the tail end, this level of customization often comes at a higher cost and longer timeline compared to purchasing an existing property or a house and land package
Buyers should also account for potential hidden costs, such as landscaping, utilities, and permits. Ensuring all these factors are covered in your budget can help avoid financial surprises down the road
4. Existing Homes
Buying an existing home is very often a fast track to homeownership. The main benefit on offer is the fact that you’ll see exactly what you’re getting before you buy it. You can inspect the property in detail, assess the neighborhood you’ll potentially move into, and evaluate whether it meets your needs without the uncertainty that comes with new builds.
Existing homes and older properties are particularly dear to our hearts and usually have charm and character. A smart future homeowner should be aware that existing homes can also come with hidden costs. Repairs could end up being a sizable part of your budget.
It’s of the utmost importance to inspect the property and get quotes for any necessary repairs before finalizing the purchase. If you haven’t seen the “Money Pit” from 1986 make sure that you organize a screening and take it as a documentary.
5. Condominiums and Townhouses
If you’re seeking low-engagement living consider condominiums and townhouses. These are very often in urban areas and come with many benefits like gyms, pools, and shared green spaces. An even bigger boon is that you can forget about some of the hassles of homeownership. Most of these have a homeowners association (HOA) that manages exterior maintenance and communal spaces.
Be advised that there usually exist additional costs associated with condos and townhouses, including HOA fees for example. These fees can vary wildly and cover services like landscaping, building maintenance, and security. You’ll be paying for simplicity but that’s no news given how simplicity-oriented the economy is today.
Since we’re already on the subject of HOA, be sure to check HOA’s rules and regulations to ensure they fit your lifestyle. For example, some HOAs may have strict policies regarding pets, parking, or renovations, which can be limiting for you or just what you want.
Endnote
In this piece, we’ve opted to give a quick overview of some of the housing options out there, so that you can have an idea on what to expect on the real estate market. Of course, this isn’t the end of the options out here.
Just finding your housing option is not the end of the line. There are many financial options out there to consider, which is a whole other can of worms that will require special research.
