What to look for when buying a house

Choosing a home often boils down to value, in terms of both the price you pay and the enjoyment you’ll get from owning your home. The average home price reached $501,700 in the second quarter of 2024, according to the St. Louis Federal Reserve Bank, making it more important to ensure you’re spending your money on the right home. 

This house-hunting guide will teach you what factors to consider, how to find the right location, and what to inspect — both inside and out — when you buy a house. 

Why is it important to know what to look for when buying a house?

While the average home price is above $500,000, you’ll still likely pay above $200,000 even in the lowest-priced markets in the U.S. With that kind of investment — perhaps the largest purchase you’ll ever make — it’s vital that you know what you’re in for before you sign a contract.

That doesn’t mean the home you buy needs to be pristine in condition. In fact, a recent survey from RE/MAX found that 56% of prospective homebuyers are willing to buy a fixer-upper, especially if they can get it for a better price. 

What are the key factors to consider?

The most important factors to consider when you’re buying a house are price, location, and the condition of the home. 

Price

Price is usually the first consideration for many buyers because you can only compromise so much on your budget. The top of your budget typically equals the amount for which you’ve been pre-approved, plus your cash available for a down payment. You can buy a home for less than that amount, but you can’t go over.

Location

Location is also a prime consideration because of its impact on home values. It’s often true that the worst home in the best neighborhood is better than the best home in the worst neighborhood. Desirable locations typically have more competitive markets, which support higher values.

Condition

The home’s condition strongly influences its value and suitability for your lifestyle and budget. Homeowners performed an average of 6.8 maintenance projects per household last year, according to Angi. The total cost of these projects averaged $2,458, and home emergency spending was $1,667 per household.

What are the potential red flags?

Some problems are only apparent when you take a close look at a home, and some won’t be evident to you at all, which is why a professional home inspection is so important. As you begin researching neighborhoods and visiting properties, you should keep an eye out for signs that the house hasn’t been maintained or the location isn’t going to work for you. 

Here are some red flags to be aware of, and perhaps avoid, when buying a house:

• High number of homes for sale: An unusually high number of homes for sale, especially if they seem well priced but are sitting on the market for a long time, could be a sign that something’s amiss with the location. 
• Short sale: A short sale happens when a homeowner sells the home for less than they owe on their mortgage in an effort to avoid foreclosure. Owners of these distressed properties often lack the funds for basic maintenance and repairs, and on occasion, an owner might leave damage.
• As-is sale: An as-is sale is one where the owner is selling the home in its current condition and will not entertain requests for repairs or improvements. Do your due diligence because the owner will accept practically no responsibility for anything that goes wrong after you move in. 
• Poor curb appeal: A poorly maintained home exterior and yard might be a sign that the seller has been lax about overall maintenance. 

How do I assess the location and neighborhood?

Where you live impacts your home’s value and your enjoyment of the home. Doing your research before you make an offer can help ensure that you’ll be satisfied with the purchase.

A simple way to assess the neighborhood is to drive around to get a feel for the local vibe and the home’s proximity to shopping, schools, healthcare facilities, parks, and other important locations.

If you’re looking to buy in a community governed by a homeowners association, check its website for documents explaining the community’s regulations, restrictions, and fees. 

Several additional websites can provide more information: 

• Social media: Facebook and Nextdoor might have groups specific to the neighborhoods you’re considering moving to. Members can be a great source of information about what it’s like to live there.
• GreatSchools.org: Type the name of a school or school district and its location, and GreatSchools.org will show you ratings and reviews. You can sort the lists in a variety of ways.
• WalkScore.com: Enter the address of a home you’re interested in using WalkScore.com, and the website will show you how easy it is to get around on foot or by bicycle. It also shows your proximity to public transportation.
•  FBI Crime Data Explorer: This government website has crime data voluntarily provided by police departments and other agencies.

What should I inspect inside the house?

The home tour is a good opportunity to get a feel for the home and look for obvious signs that it’s in need of repair. Here are some of the most important items to assess inside the house:

• Walls and ceilings: These are perhaps the easiest thing to check. For example, cracks in the wall could be a sign of a structural issue or house settling. Discoloration, bubbling, and mold spots may indicate water damage.
• Flooring: Look for even, level floors with no soft spots.
• Plumbing: Check for dripping faucets, and if possible, take a quick peek under sinks to look for leaks. Turn on faucets to check for adequate water pressure.
• Windows: Look at the condition of the window frames and glass, and try opening and closing windows to see how they function.
• Basement or crawlspace: Watch out for signs of flooding, such as staining, musty odors, and cracks.

What should I inspect outside the house?

The outside of the home can tell you a lot about its condition. Here are some specific things to check:

• Roof: The roof should be free of sags and missing shingles. Also, gutters and downspouts should be in place.
• Siding: The siding should be in good repair, with no signs of deterioration.
• Foundation: Check the exterior for cracks.
• Porches and decks: These should be level and in good repair.
• Yard: Look at the slope of the yard to see if it directs water away from the house. Also check for trees that have branches hanging over the roof or roots that are too close to the foundation. 

What to look for when buying a house FAQ

How can I identify hidden issues in a house?

The best way to identify hidden issues is to have a professional home inspection. While it’s not typically required, many homebuyers schedule an inspection when they close on a home to help identify hidden problems. 

What questions should I ask the seller?

One of the most important real estate tips, especially for first-time homebuyers, is to ask for the seller’s property disclosure before you put in an offer on the house. A property disclosure should include a list of known defects as well as information about repairs and renovations. Most states require sellers to provide one, and the earlier you get it, the better. 

Once you’ve received the disclosure, you can ask for more detailed information about items that concern you. If the seller did their own renovation, for example, you might ask if they had a permit and whether an inspection was required after the work was complete.

You also might ask the seller why they’re moving, what they’re including in the sale, and how much their monthly utility bills are. 

Is it necessary to hire a home inspector?

A property inspection isn’t required, but it’s the only way to know the condition of the home before you buy. A professional home inspection checklist includes the electrical, plumbing, and heating/ventilation/air conditioning systems, items related to the structural integrity of the home, and the proper function of appliances, windows and doors, and other elements. Forgoing the inspection is akin to purchasing a home sight unseen.

What are common deal breakers when buying a house?

The most common deal breakers are damaged siding and other exterior issues, problems with weatherproofing, and the number of repairs needed. Foundation problems, wall and ceiling cracks, and poor remodeling work can also deter buyers.