Many people save for a new home for years, planning out large down payments to be able to afford the right home in the right area, and to find the right loan company to help make their dream home a reality.
With such a weighty decision involving a great deal of time, money, and often emotion, it is easy to get caught up in the little details which, in the long run, might not make as much of a difference as you anticipate.
Most people put their focus on issues like the school district, potential for resale value, curb appeal, whether the house has new appliances, and the house’s proximity to their jobs, but those are not necessarily the issues that will be important down the road.
Here are the top four tips for buying your first house overseas:
1 – Your Finances Come First
So often we get caught up in the fun part of buying a home that no one wants to think about financing options. Make sure to shop around. Different banks have varying interest rates, and over time that can add up to thousands of dollars’ in difference.
Also take into consideration the methods in which you can pay. Since you’re buying the house overseas, you may need to use a foreign money transfer service to send the money to your bank.
2 – Consider The Whole Neighborhood
You need to consider the neighborhood, and not just the school district. Every parent wants to give their child the best access to education possible. Often, that means moving into an area that has significantly higher property tax rates to finance a top notch school system, and that is not something which will be reflected in the price of the home.
If you are planning on having children, or already have children, you will certainly want to be close to a great school, but there are ways to avoid the higher property taxes. For example, if you live within a district with sub-par schools, you may be eligible for a voucher program, which takes the tax money that would have been allotted to your child for his or her education and lets you use that money at whichever school you choose that has a better rating.
That means that you may be able to find a more affordable home with lower taxes and send your child to a more beneficial private school for a fraction of the cost.
3 – Don’t Worry About Resale Value (Yet)
Unless you are planning on flipping it, do not worry about resale value (yet). The housing market goes up and down for a variety of reasons, many of which are unpredictable. For example, you might purchase a home in a very high end neighborhood, but ten years from now people move, demographics change, and the area may not be as desirable as it was when you moved in.
Likewise, you might purchase a home in an up and coming “transitional” neighborhood for a very low price, banking on hopes that resale value will skyrocket over the coming years, only to be disappointed when the neighborhood does not resurrect like it is expected to. Even if housing prices do go up over the years, there is no guarantee that your neighborhood will benefit from those increases
Instead, focus on amenities near the neighborhood, like proximity of stores, restaurants, gyms, or museums, and look for signs of pride in ownership. If lawns are manicured, fences are mended, paint is unchipped, it is more likely that fellow residents are planning to stay, and it is more likely that your neighborhood will stay nicer longer.
4 – Don’t Worry About Appliances
Do not yet worry about the appliances, or anything else that is not attached to the house. It is so easy to get caught up in the excitement of seeing a home that is turn key and ready to move into, but superficial elements like that should not influence your ultimate decision to purchase the home.
The important things to look for in a home should be structural, because ultimately they are the elements that get very expensive to fix. Make sure the floors are not sloping, windows are not drafty, the roof is solid, and the basement is not leaking.
The elements of the house that are not structural, like appliances, paint colors, flooring, or countertops, can easily be changed out once you move in. If the home is particularly outdated or missing appliances altogether, you might even be able to make allowances for appearance upgrades in the price of the home.
Buying A Home Overseas
When you are ready to make the big decision to cash out your savings and put a down payment on your first home overseas, do not make the mistake of putting priority on insignificant things that will not ultimately make a difference.