The home buying process can feel stressful and confusing. It's easy to second-guess your gut or overlook important issues when your brain is swimming with conflicting questions: Do I love it? Can I afford it? Would this room look good in yellow? How long before the roof needs replacing? What's that smell? I'll get used to it, right?

Buying a house can be one of the most important financial decisions we make in our lives. But how do you know you’ve found the right home? By striking a balance between your emotions (I love this house!), practicality (this house would be a sound choice) and reality (I can afford this house), you’ll be on your way towards happy days of home ownership.

Here are five key items to consider before you sign the papers and make this big commitment:

1. Price out possible renovations and upgrades.

Unless you're buying a new or recently renovated house, you'll probably have some changes in mind—ranging from the small (painting a room, installing new shelving in a closet), to the big and expensive (a kitchen or bathroom upgrade, adding a sunroom or garage).

Conduct some online research and talk to an expert to get a ballpark on what these renovations could cost. Unless you're an expert handyperson, don't forget to include the cost of labour.

Even seemingly straightforward projects such as moving a wall or two can become a larger investment if things like asbestos remediation or new electrical wiring is needed. Gather as much information as you can while you’re weighing your options.

Once you have a general dollar figure, add it to the asking price and decide if you'd still buy the home for that much. If the answer is yes, talk to your lender or financial institution to figure out the best way to pay for those renos once you own the home. Depending on the repairs / renovations needed, you can sometimes negotiate the asking price of the home to take that into account. Your real estate agent can counsel you with this approach.

Understanding how to  Value your return on renovation investments can also be helpful for your decision making.

2. Consider home maintenance time and costs.

A charming old Victorian on a big corner lot may sound like your dream home, but the ongoing maintenance, repairs and restorations may overwhelm you, particularly if you're a first-time home buyer or moving from a new or smaller property like a condominium.

Whether it’s a leaky foundation to outdated electrical to drafty doors and windows, older homes can be more expensive to maintain. If it’s on a large lot, that big yard will need mowing, those mature trees will need pruning and will drop leaves that need raking, and your corner lot sidewalks—yes, two stretches of sidewalk—will need shoveling.

Consider the practical aspects of home maintenance, and then decide if you can (and want to) accommodate that lifestyle and cost. A rule of thumb is that maintenance will cost 1% of your home's value every year (e.g., for a $300,000 home, that's $3,000 per year).

3. Assess the neighbourhood, in addition to the home.

House prices vary greatly by location, and many homeowners have their hopes set on a favourite neighbourhood or two and can be reluctant to explore other options. Think about your priorities: close to work, great schools in the vicinity, walkability, mature trees, or a quiet street —and focus on locations that meet some of your requirements. Prioritize what’s most important for you, and be willing to compromise. If you’re just starting out, you might not get everything on your dream list, but you can focus on your “must haves”. 

When you find a house in a location you like, drive by at different times: in the evening, on the weekend, and during the work week if you can. You may discover a lack of on-street parking, bustling school traffic or noisy neighbours. These issues may not be deal-breakers, but the solutions (like renting a parking spot) may be costly and should be included as part of your home budget considerations.

4. Think about your needs now, in five years and in 10 years.

Ideally, you want to purchase a home that’s right for your lifestyle today, but can also grow with you. A downtown condo may seem like a great idea right now, but if you’re thinking of growing your family soon, will that choice work for you in a few years? 

By comparison, if you're a single 20-something who commutes downtown daily, consider your lifestyle and needs when it comes to choosing a home. For example, a larger home in the suburbs may create a longer commute time for you, not to mention maintenance costs and home ownership chores. As a compromise you may consider a smaller home a little closer to work, offering you the best of both worlds. 

“If my life changes, I’ll just move”. This may seem like an easy solution, but you should consider the costs of changing real estate within a short time-frame. You’ll need to take into account the market, interest, equity and appreciation.  

Mortgages are structured so that you put more money towards interest early in your term. The longer you hold on to a property, the more you'll pay down your initial mortgage amount (the principal) and the more equity you'll earn in your home. Also, home values tend to rise over time, so you could benefit from an increase in value the longer you hold on to your home.

Also consider the time and expense involved in home buying: the property search, listing your current home (and staging it), and other costs associated with real estate such as closing costs, movers, legal and realtor fees. It can add up. 

5. Consider the advice your real estate agent and home inspector can provide.

Real estate agents and home inspectors understand the home market well, and can provide you valuable advice that can save you time, money and big mistakes. 

If they point out areas of concern, take this information into account when you're calculating the affordability and suitability of a property. It’s easy to be swayed by a home you love emotionally, but take into consideration the practicality of the home, and don’t let your emotions get in the way of possible trouble down the road.

Your new home should make you feel comfortable—emotionally and financially. If you're constantly stressed about your mortgage or the repairs you need to make, those original hardwood floors and shiny new stainless steel appliances aren't going to help. By making an informed decision that balances your head and your heart, you can help avoid new homeowner's remorse.

 For more tips and advice, check out our complete guide to buying a home in Alberta. You'll find information to help you feel confident throughout your home buying process.