First Time Buyers: Don't Overlook a Home's Potential When House Hunting

For first-time homebuyers, shopping for a home is an exciting, albeit nerve-wracking, experience. If you're like others in the market for their first home, you probably have in mind exactly how your soon-to-be home will look.

But it's important not to fall into the bad decorating, dingy walls, and dirt-bare back yard equals bad-home trap. If you don't see past the hideous wallpaper, funky light fixtures, and avocado green carpeting, you may miss out on a home with great potential.

And, if you're looking for a home in a seller's market where homes are being snatched up as soon as they go on the market, you'll come to realize you can't be choosy if you want to make a competitive offer.

One of the first things to do is to get pre-qualified for a loan and determine the maximum you can afford to offer for a house. Don't look at homes that are asking for more than 5 percent above your maximum, otherwise you'll be setting yourself up for disappointment if you find the perfect - but outside your budget - home.

So what to do?

The floor plan of the home is extremely important. If a floor plan isn't quite to your liking, consider rearranging it or adding on. If you're looking at an existing home and will need to remodel or expand to suit your needs, the estimated cost of renovation should play a role in how much you offer.

Also, consider the features of a home:

Walls. While walls are one of the easiest things to remedy, they also make a huge first impression. If the walls need to be painted, are covered in wallpaper, or are painted a color you find distasteful, picture them crisp and clean in the color of your choice - that's how they could look after you paint them.

Floors. Like walls, floor surfaces that are worn or outdated can be easily replaced. You could even ask for a flooring allowance in your bid, especially if you're in a buyer's market.

View. Things like old, ugly -even dirty - windows and window treatments can make a view appear less desirable. Those things can be improved, so unless the only view you have is of your neighbor's clunker on the side of the house, don't get hung up on what is surely a fixable view.

Landscaping. Your best bet is a moderately landscaped yard because you can always improve landscaping without spending too much. Worst case, even if you're looking at dirt, landscaping is one of the more feasible projects to tackle. Plus you get to design it however you'd like if you're starting from scratch.

Closets and garages. You can never have too much storage space, which is why so many newer homes have three-car garages. But if you encounter a converted garage that is now a bedroom or storage room, don't give up. Converted garages can almost always go back to their original purpose without much cost or labor.

Kitchen. The most popular room in the house, many homeowners want their kitchen to be large and have modern appliances. Don't let color schemes from the '70s detract you, because there's nothing like a fresh coat (or two) of paint to make a kitchen your own. Plus, if you like the rest of the house enough to make an offer, you can give the kitchen a minor spruce-up with some new appliances, or a major overhaul complete with new countertops, cabinets, and flooring.

The exterior. If the home you're looking at doesn't have good curb appeal, try to picture it with a fresh coat of paint and spruced-up landscaping.

Pools. If you want a pool, buy a home with a pool already built in. The cost of adding a pool starts around $25,000, and paying to add one later will never yield a dollar-for-dollar return on investment. The cost of repairing a pool is less than putting one in, so if you're looking at a home with an old pool that looks like it's in bad shape, it's still a better bet than putting one in later.
When making an offer, bear in mind the things that you can't live without, as well as your budget. Also, be sure you hire a professional home inspector to inspect the house. If the home's systems are in good working order and the house has everything you want except a minor item or two, make an offer accordingly.

Most importantly, keep in mind that unless you're building your dream home from scratch, you'll probably never find the perfect home. But seeing past a previous owner's bad decorating choices to the core of the home and its potential for livability will yield you the home you've always wanted. It may take some work, but hey - it's yours!