Buying a home can be probably a daunting task, especially if you are going to buy your first home.It is very exciting but full of complexities!
Buying a home is likely going to be the largest financial transaction you will ever make, many buyers aren’t prepared to ensure they make a good purchase decision…and you know what?
It’s not their fault at all.The system is piled against them, with much of the power being on the side of the seller. But, if you are thinking of buying one, to help you avoid the mistakes we compiled a list of 7 Common Mistakes made by home buyers.
1. You are not doing a well proper research
You should have an understanding of family finances and needs. The wise home buyer will analyze assets, solve debts, and get pre-approved for finance before jumping into the house hunt.
One important thing is to get to know the neighborhood – you have to remember that you are not just buying a house; you’re also buying a LOCATION. It is very important to look out for the quality of schools, the crime level, transport, and possibly upcoming zoning issues.
Not all parts of every neighborhood are ideal places to live.
2. Choosing the wrong mortgage
Before going on ‘house hunting, it is very important to have your loan pre approved – that puts you in a best-negotiating position.
Look out for how much you can afford – and don’t simply go to the Financial Bank Internet site, and just use the calculators to see how much you can borrow, and hope you’ll get a loan.
There’s a big discrepancy between what the banks show they can lend you and what they actually will.
You have to be very careful when picking a finance package. Don’t just go to the bank; instead use an independent finance broker who can access a range of lenders and finance products.
3. Don’t be influenced by ‘The Market’
You shouldn’t be influenced by the market more than your own needs.It’s no secret that the property market moves in cycles – there are times when they can suit you and there are times that suit the sellers.
However, waiting for the right time or waiting for the prices to go down is playing with your family’s future. Sometimes the mixed messages in the media may confuse you and you will be motivated to put off the decision to buy.
If you know your budget, have your finance organized, and think about your current and future needs, then you should rarely let short-term market conditions influence what will be a long-term lifestyle decision.
4. Going beyond your budget
Everyone who’s about to buy a home knows this feeling: you are looking for a home that will fit your budget, but that much more expensive property looks much more appealing.
However, you should always keep in mind that if you are going to buy a home that is out of your price range, will derail your finances in the near future.
I suppose it is in human nature to want a bit more than we can really afford, and as that wasn’t enough, there always is a real estate agent who will be taking you to the next level.
The bank offered you a borrowing limit, for good reasons based on your ability to repay them, so don’t be tempted.
Including rises in interest rates, spending more than you can afford, leaves you also exposed to potential financial shocks.
5. Falling in love
If you’re looking at a particular house and you think that is your ideal house, don’t let the sellers’ agent know it.
However, agents are pretty good at reading facial emotions and negotiating to the last cent out of a prospective purchase.
A smart home-buyer knows the fact that there are a lot of houses and eventually will find the one that’s the right house and with the right price.
If you have not found it yet, just keep looking.
6. It’s not all about price
We all know that you make your money in property when you purchase, but that does not mean you must buy cheaply.
Remember, you will make money by buying the right property, not the cheapest property investment, Value is what you get, price is what you pay.
So the take from this is that you should not make your decision purely on price.
Remember, you can always buy properties in secondary locations with cheaper prices, but you will be stuck with secondary property, which is not a good idea.
You must make a proper offer, once you’ve found the right property for your needs. An offer that secures your home, but also one that doesn’t overpay. You should not base your offer on the asking price from the seller’.
Instead, you should get a comparative market analysis from the agent of your buyers.
This analysis will reveal to you the sale prices of similar homes close to the neighborhood. With this in mind, you should be able to make an appropriate offer.
7. Not having the right protection clauses inserted in the contract of sale
This might sound obvious, but you shouldn’t sign anything until you are very sure that your interests are protected.
The standard contracts to purchase a home will give you what is called a “3-day cooling-off period”, smart purchasers will request additional clauses that will protect their interests.
Do not be fooled by some agents who claim that you can always make changes or ask for an extension late.r That is not how this works. So you should be very careful.
Ending the contract and renegotiating for the new one is the only way to get changes to a contract that’s been signed. The seller does not have to agree to your requests.