Boston area home buying is neither an art nor a science, but somewhere in between. There are a number of factors to consider when you’re ready to buy. In addition, there are some proven strategies that will help you buy a home that is likely to appreciate more quickly. Let’s take a brief look at a few ideas that may give you “more bang for your buck!”
Boston Area Home Buying: Ideas to Consider
Don’t buy the worst house in the best neighborhood. Many homebuyers assume that a popular neighborhood raises the value of all the homes within that neighborhood. While that may be true in some instances, the simple truth is the worst house(s) in the neighborhood rarely appreciate that quickly. A better approach is to consider buying a reasonably priced house near the hot neighborhood and allow the property values gradually extend to the adjacent neighborhoods. Real estate experts refer to this as the “halo effect.” The halo effect is when one trait influences the perception of the whole. It focuses on a positive trait that makes the entirety seem better. In other words, the attraction of having a popular, desirable neighborhood will give the perception that the immediate surrounding neighborhoods or subdivisions are equally as popular, trendy, or up and coming.
How can you predict the next hot neighborhood? Many real estate professionals say follow popular successful retail chains like Starbucks, Trader Joe’s and Whole Foods. They often open in neighborhoods where home values are on the way up. Experts say homes located within a mile from Trader Joe’s or Whole Foods appreciate faster than in most other areas.
The key is, of course, timing. Often, by the time the hot retailers move into a neighborhood, the values may already be on the rise. That’s why it pays to listen to a knowledgeable, experienced real estate agent who may know about deals or developments that are about to occur.
Choose the financing that’s best for you.
With all the mortgage choices available in the Boston area home buying market, it’s easy to take the first one with the lowest interest rate. However, a fixed rate 30-year mortgage may not be right for everybody. In fact, an adjustable rate mortgage (ARM) could be an option worth considering – especially if you don’t plan to be in the home for more than 5-7 years. In addition, an ARM may allow you to save money with a lower interest rate during the initial term. Some home owners have found that helpful in enabling them to afford a more expensive home. Still, other home owners opt for the rate security that a fixed-rate 30-year mortgage offers. The key to making the right decision is to plan ahead, know what your financial plans and capabilities are, and select the mortgage program that best fits your individual situation. Consult a mortgage professional, a CPA, or a financial advisor if you need additional information.
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