Now that you’ve figured out what you can afford and how much you’re going to have to budget for those monthly mortgage payments, you ask yourself, “Where should I live?”
Obviously, you want to find the right home, but before you do, you need to find the right neighborhood – the one that fits your needs.
Choosing a neighborhood
Before looking for the home that fits your taste and budget, it’s important to get the facts on neighborhoods. In the end, you’re not just buying a house, you’re also buying into a larger community. What happens outside your door has great impact on the value of your home. That makes a difference especially in terms of resale value, should you ever choose to sell the house.
In addition to the financial impact that a neighborhood has on home values, there’s an emotional component, too. That’s why it’s important to make a good choice for value and resale as well as a good choice for where you feel comfortable, whether it’s a cozy cottage on a suburban cul-de-sac or a classy condo in a downtown high-rise.
How do you know whether a neighborhood is right for you? First, consider your lifestyle and interests. Where do you work, how do you get there and how much time are you willing to spend on your commute? One thing to keep in mind: Psychology experts who have studied happiness argue that you’re more likely to be happy if you buy a smaller house with a shorter commute than a bigger house with a longer commute.
When it’s time to relax, do you like to walk the dog, browse the shops or hit the clubs and cafes? Are there good services, amenities and schools? When you start to prioritize your preferences, you’ll likely find your choices can quickly shrink to just a few neighborhoods that fit the bill.
To view neighbourhoods in Hamilton and surrounding areas click on the Neighbourhood profile tab.
What kind of Home?
There are many different types of homes, but the vast majority fit into one of several broad categories. Depending on your particular situation, it may be best to focus on one of the following:
This can be anything from a 100-year-old handyman’s special to a designer home in the most posh planned community in town. Whether it’s a starter home or a starter castle, it is, by definition, a single house on its own parcel of land.
As the owner of a single-family detached home, you get to make all decisions (within reason) regarding exterior style, yard improvements and household rules (parking, pets, late-night noise, etc.). The flip side, of course, is that you also get to pay for all repairs and routine maintenance.
Condos, too, take many shapes and forms attached townhouses, warehouse lofts, high-rise apartments, etc., but all adhere to two basic principles:
- Each owner owns the interior of their unit — “from the paint in,” as they say — and a portion of everything else from the roof and exterior walls to any communal facilities
- All owners pay dues to fund a homeowner’s association that handles maintenance, common-area repairs, insurance and unpleasant surprises.
For some buyers, a condo can be an excellent choice. They tend to be more affordable (lower construction costs, shared expenses), require less maintenance (someone else cleans the gutters and mows the lawn) and often have amenities (a pool or fitness center). The downside? More density, which can lead to greater noise, less privacy and potentially, less appreciation when you’re ready to sell.
Its short for cooperative apartment, and although they’re not common, they are an option. They typically resemble condominiums, but instead of owning their own unit, co-op owners become shareholders in the corporation that owns the entire property. The corporation (through a board of directors) assesses monthly dues, manages the property and pays the mortgage and other bills.
More to the point, perhaps, shareholders get to vote on all major decisions, including who gets to live in the co-op. In other words, your fellow owners can turn down prospective buyers based on everything from financial concerns to perceived reputation (although, by law, they can’t discriminate). In other words, getting out (i.e., selling) can be just as difficult as getting in.
The term “town house” or “town home” isn’t a legal one, but rather a decorative one. Simply put, it refers to homes that are individually owned (along with the land beneath them) but that also share common walls with one or more neighboring homes.
From inner-city row houses to downtown duplexes to golf-course villas, they occupy a sort of middle ground between condominiums and single-family detached homes.
Are they a good idea? It depends on your tastes and interests. Like detached homes, most provide a yard (although usually quite small); like condos, they often provide communal amenities (e.g., a swimming pool, tennis courts) but with the same noise, privacy and stylistic issues. And, assuming you’ll sell someday, it is wise to be aware that, all things being equal, town houses generally appreciate more than condos, but less than detached homes. However, they are usually cheaper than a detached home.
Buying Old Homes vs. New Construction
New House, New You?
Unless you are looking at a custom-built house on an individual lot, most new homes are built in developments with a unified style. These developments can be as small as a cul-de-sac, or as massive as a former farm field filled with dozens, if not hundreds of homes. Built to the latest codes and standards, they tend to be contemporary styled, energy efficient and often are more expensive than resale homes of a similar size. Sometimes, these types of developments can represent a savings over established developments with existing homes. Either way, the decision about whether to forgo an establish community is worth taking time to consider. Specific details vary, of course, but consider the pros and cons.
Pros and Cons of New Construction
- Contemporary style
- Some flexibility on design during construction phase
- Cheaper to maintain (new appliances = fewer repairs)
- Cheaper to operate (energy-efficient construction)
- Extended warranties
- Cohesive neighborhood (consistent layout, common areas)
- Frequently have a homeowners association (helps protect resale value)
- It’s brand-new!
- Cookie-cutter design
- Limited negotiating room on price
- Potential for homeowners association dues
- Frequently less character, or homogenous design
- Frequently have a homeowners association (can put limits on how you use your property)
Of course, one home buyer’s pro (“No one has lived in it before us, so we won’t inherit any problems.”) can be another’s con (“No one has lived in it before us, so we have no way of knowing about any problems.”). Fortunately, there are ways to make sure the house you’re buying is really the house you want:
- Check the builder’s track record. What else has the company built? Were previous projects completed on time, on budget and without bad blood between the builder and buyers?
- Walk the streets. If you live nearby and previous stages of the development are occupied, ask the residents if the builder did quality work and lived up to contractual commitments.
- Picture your home, not the model home. You can certainly have the granite counters, surround-sound home theater and jetted tub you saw in the model home, but they’re not included in the base price. You will pay extra for them.
- Bring your own agent. If the builder has a real estate agent on site, the agent will be more than happy to help you. But, on-site agents work for the builders who hire them. Their best interests will be for the builder, not you.
Finally, consider the intangibles. Similarly styled homes attract like-minded buyers, and most developments are built with families in mind. Depending on your point of view, the consistency, conformity and kids playing in the street can be a blessing or a curse.
Existing /Resale Homes
Old = Charm?
With new developments springing up seemingly overnight, it’s obvious that new construction is popular. And yet, most people buy a resale home; i.e., a home that someone else has lived in but is now on the market again. Call them used if you must — existing home sounds better — but they’re the kind of houses that many people would like to call home.
Of course, there are pros and cons with existing homes, too. (That darling farmhouse with the big windows? It can be mighty drafty come winter.) Generally speaking, resale homes tend to be more available and less expensive than new homes, but they are also full of surprises.
The Pros and Cons of Resale Homes
- Availability: More choices, more styles to choose from
- Price may be more negotiable
- Track record: Known issues will be revealed in disclosure documents
- Established neighborhood
- Could contain more charm and character
- • More maintenance: Things break or wear out
- Less energy-efficient: More costly to operate
- Dated design, older appliances and amenities
- It’s been lived in!
As with new construction, there are ways to make buying a resale home less scary:
- Have the home inspected. You do not want to find out the foundation is cracked or the roof needs to be replaced after you move in.
- Consider a counter-offer. If the inspection reveals fixable flaws, propose the seller do the repairs or lower the price.
- Expect the unexpected. Pipes leak, electrical work becomes outdated and furnaces fail — get used to it.
- Be honest with yourself. If major repairs are required, you’ll either have to do them yourself or bring in the professionals. Some people can handle the disruption; others can’t.
The bottom line on resale homes is this: Don’t buy someone else’s problems unless you can tackle the solutions. Find a house you like, consider its pros and cons — objectively, as well as emotionally — and think about the compromises you’re willing to make. The more logically you approach buying the house, the more you’re going to love living in it.