What Type of Home is Right For You

You thought that choosing the right neighborhood, size, number of bedrooms, closeness to work, proximity to schools and immediacy to shops were all difficult decisions, but one of the first real estate decisions should be what type of house you want to get. Although houses can come in a mind-boggling variety, a recent MotleyFool.com article discussed the four main types of homes for sale: new home, used home, fixer-upper and foreclosure.

1. New Home

There are plenty of advantages to getting a new home. Everything in it is new, so repairs and maintenance costs should be minimal, and most builders offer a warranty that can be five to 20 years. Also, you get plenty of chances to make it uniquely yours by choosing all the upgrades and options you want right at the start. A few warnings though. Getting all those options can be pricey, and bring up the base price of homes for sale by tens of thousands. Keep this in mind when deciding what price range to look for. Also, do plenty of research on the builder. Make sure they are reputable and that their work has a history of being of high quality. Finally, do not be too shy to negotiate. As with all home purchases, there is plenty of wriggle room.

2. Used Home

Whether it is called a used home, a resale home or a “gently used” home, it all means the same thing: at least one person has previously lived in the house. There are some basic facts you will have to accept with a used house. You will almost certainly want to change certain things, and there will almost certainly be much higher repair and maintenance costs. A home inspection is a must – you have to know the quality of the house you are buying. A warranty is also a good idea, and not usually that expensive considering the peace of mind you are getting.

3. Fixer-Upper

The idea here is that you’ll be able to afford much more house than you could otherwise hope to have, and at the same time, make something lenders call “sweat equity” – this is basically the difference between the purchase price of the house, plus all repair costs, and the end resale value of the house. The bigger the number, the better the investment. Of course, a fixer-upper means a lot of hard work, disruption and time. If you are prepared to make the sacrifice, it could well turn out to be a great real estate investment, and a great place to live!

4. Foreclosure Homes

Any home could end up being foreclosed on, meaning that the owner could not make the mortgage payments, so whoever held the mortgage has taken possession of the house and is trying to sell it. Typically, you can get some great deals on such houses in exchange for a quick sale, such as lower prices, smaller down payments, special loan assistance, reduced closing costs, etc. However, keep in mind that someone who could not afford to make mortgage payments probably could not afford to make the necessary ongoing repairs and maintenance every house needs.

Now that you understand your options, you are one tiny step closer to finding your dream home!