A home is one of the biggest financial investments in your life, and once you’ve put your signature on paper, it’s difficult to turn back if you change your mind. While property is almost always an appreciating asset, some bad decisions – or simply not doing the proper homework/precautions – can severely hurt your chances of getting the most out of your purchase. Try to avoid these common mistakes by first-time home buyers, and keep these 10 commandments in mind before you go ahead.
#1 Not Doing Your Research
Nowadays, people do research on almost everything they buy, from comparing prices of daily groceries to the latest tech gadgets and cars. So why not do the same when it comes to the most important (and likely most expensive) purchase of your life? A house is a big ticket item that requires thorough market and location research before you lay down the initial payments. With the help of the internet and some legwork, you can easily research properties in your preferred area, consider various factors, and understand the market value of the property you’re eyeing. This will give you an upper hand when negotiating the final price and avoid getting scalped by unscrupulous agents.
#2 No Financial Approval
There’s nothing more depressing than seeing your dream home slip away to another buyer because you can’t finance it. The number you get from online loan calculators could be a lot different from what the bank allows you to borrow. (We’re not saying loan calculators are bad; just use it as a rough estimate instead of an exact amount.) One good way to avoid this kind of disappointment is to have your home loan pre-approved before you begin house-hunting. It will give you an idea of which areas and what price range to look out for.
#3 Stretching Your Finances
In other words, bite off only what you can chew! Many people want to buy properties that are way beyond what they can afford, which leads to disappointment and being unable to properly budget their income (see #2). Instead of rushing to buy a property that is above your payroll, why not purchase something within your means first, then consider ‘upgrading’ to a better house that likewise better suits your finances a few years later? The first house can then be used to collect rental income to offset the payments for a second home.
#4 Not Doing Proper Building Inspections
Remember the tale of the three little pigs? The one with a solid brick house was safe, while the other two pigs had their house destroyed in a puff. That’s what happens when you don’t carry out the appropriate building inspections upon – or better yet, before – moving into your new house. For peace of mind and to avoid costly repairs or renovations later, inspect every nook and cranny of the house (or engage a professional). This will help you avoid moving into a house with plumbing issues, termite infestation and sub-standard construction, among others.
#5 Buying Straight Off The Plan
We’ve all been there: drooling over the glossy brochures full of beautiful pictures depicting a house or condominium unit in all its brand new glory. Tempting as it is to throw down your money and book a unit immediately, don’t! Looking at pictures and going on virtual tours may be fun and exciting, but unless you check it out with your own eyes, you might well end up with something that is very much different from what you imagined. Make the effort to check out the property – or the showroom – in person and verify that what you see is what you (will) ge, before you go ahead with the downpayment.
#6 Not Reading The Fine Print
Assuming you’ve done and passed all the prerequisites to purchase a house, the last step is signing the contract. Before doing so, ensure you have read and understood the entire contract. Once you have signed the papers, it cannot be modified, so take your time to read the fine print and don’t let yourself be rushed by an agent who is in a hurry to close the deal. Making changes to the contract later on will be a huge hassle, one that may me more trouble than it is worth, therefore it is important to read the T&C before you sign and seal the deal.
Source: The Finance Site