Buying a home can be a daunting task, especially if it’s your first. It is exciting but full of complexities.
While it’s likely to be the largest financial transaction you will ever make, we’ve found that many home buyers are poorly prepared to ensure they make a good purchase decision.
And it’s not their fault. However, these are a few tips to ensure you make a good purchase.
- Not doing proper research and preparation
Understand your family’s finances and needs. The wise home buyer will analyze assets, decipher debts and get a good financial plan before plunging into the house hunt.
Get to know the neighborhood – remember you’re not just buying a house; you’re also buying a location. It’s important to find out about the quality of schools, the crime level, transport and possibly upcoming zoning issues.
2. Going beyond your budget
Every homebuyer knows the feeling – you’re looking for a home that fits your budget, but that expensive property just looks much more appealing. However, buying a home that’s way out of your price range could well derail your finances in the future.
It’s human nature for us to want a little more than we can afford, and there’s always a real estate agent who’ll talk you to the next level. But don’t be tempted – the bank usually offers you a borrowing limit for good reasons based on your ability to repay the loan.
Spending more than you can sensibly afford leaves you exposed to potential financial shocks, including rises in interest rates.
3. It’s not all about price
We all know you make your money in property when you buy, but that doesn’t mean you must buy cheaply.
You make your money by buying the right property, not a cheap property. Price is what you pay, value is what you get. This means you don’t make your buying decision purely on price.
- Not organizing a professional building inspection
It’s important to engage a competent and independent professional to check your potential new home.
Remember… these inspectors are trained to find faults, so don’t freak out when they produce a long list. Look out for major faults but don’t let minor faults that are easily repaired trouble you too much.
- Going Solo
The sellers have an agent protecting them, looking after their interests and advising them, but most home buyers go solo.
Sure, you’ve read some articles and done your research on the Internet, but this is likely to be your largest purchase ever and those emotions will cloud some of your decisions.
You wouldn’t go to court without a solicitor on your side – would you?
You probably have a good head on your shoulders and may even have a good working knowledge of the home buying process.
What you probably don’t have, however, is perspective.
If, how and when you buy a home are all decisions that will have major consequences.
That’s why it’s important to have the same protection on your side that the seller has. That’s why it’s critical to engage a professional agent to represent your interests.