You may get lucky and find the neighborhood of your dreams right away. You're far more likely, however, to end up evaluating the strengths and weaknesses of several neighborhoods while trying to decide which one to favor with your purchase. If you're on a budget -- and most people are -- you may have to compromise and make tradeoffs.
Prioritize your needs
Buying a home when you have budgetary constraints involves making tradeoffs. When push comes to shove and you have to choose a place to live, you must decide what is most important to you.
You should examine the health of the local economy, area amenities such as parks and entertainment, school quality, and crime rates before you buy a home. Here are some sources of information:
- Tap local resources: Check the local library. The local chamber of commerce is another excellent source of information.
- Talk to people who live in the neighborhoods: Who knows more about a neighborhood than folks who live in it? See what residents say about the other neighborhoods you're considering. Also ask renters because they are generally more candid about the shortcomings of a neighborhood. Drive or walk through the neighborhoods at various times of the day and evening to make sure that their charm stays.
- Get days-on-market (DOM) statistics from your real estate agent: DOM statistics indicate how long the average house in an area takes to sell after it goes on the market. As a rule, the faster property sells, the more likely it is to sell close to full asking price. Quick sales indicate strong buyer demand.
- Get help from a professional: Ask a real estate broker, agent, lender, or appraiser to compare the upside potential of home values in each neighborhood. Get an analysis of each neighborhood's present and future property values from full-time real estate people.