Buying a home is likely to be your biggest ever investment. Any mistakes you make are going to cost you a lot, emotionally and financially. Keep these things in mind before buying.
1. Check Out The Location
When you find a home you are interested in, do not base your decision to buy just on the property’s merits alone. The home you are interested in may look just like what you want, but you will not enjoy living there if it turns out you don’t like the neighborhood for any reason. You should visit the prospective neighborhood at different times of the day, and check it out at night as well. The kinds of things you might want to look out for are traffic volumes or excessive noise, for example. You might want to do a test drive to see how long it takes you to get to and from work from this location. Try to do this at the times you would normally have to commute.
2. Don’t Skip The Inspection
A professional home inspector will be able to spot things that the average person might miss. Much of a building’s structural components are hidden. If you buy a home that has structural problems, it can cost you a small fortune (sometimes a big one) to have them fixed. A home inspector will prepare an independent report that could save you a lot of money. Even if the inspector finds no major problems, the report may give you some leverage for persuading the seller to reduce the asking price.
3. Calculate The Real Cost Of Ownership
Many people, especially those who have been renting, make the mistake of getting a mortgage based on how much they can pay each month. As a homeowner, you will have other bills to pay apart from your mortgage. You will need to insure the home and pay property taxes and community or association fees. You may have to pay for utilities like water and garbage disposal. If you have family, it is also advisable to take out a life insurance or mortgage protection policy that will pay off your mortgage if you die. As the owner, you will also be responsible for all maintenance and repair costs. Failure to take all these additional costs into account can get you into deep financial trouble.
4. Don’t Pay More Than You Have To
Most sellers expect buyers to haggle over the price. They will always state a price that is higher than they actually expect to get. Just how much they are prepared to discount can be tricky to work out. If you make a bid that is ridiculously low, the seller may refuse to have any more dealings with you. On the other hand, if you bid more than the seller was hoping to get, you have essentially overspent on the home. It pays to do some research into local property prices.
5. Get The Best Mortgage Interest Rate
You are obviously going to shop around for the most attractive rates, but you have no guarantee that any lender will make those rates available to you. All lenders publish their rates, but if you read the small print, you will always see some disclaimer to the effect that these rates may not be available to everybody. The actual rate you will be offered will depend largely on your financial history and your credit score. Having too many credit cards has a negative impact, even if you do not owe money on them. Consolidate your cards to two or three before you apply for a mortgage. Also, avoid any major credit purchases in the months beforehand.
6. Get A Property Survey Done
Many lenders will insist on this anyway, but it is essential that you know the exact extent of your property. It is not uncommon that there is no visible boundary, such as a wall, between adjoining properties. You need to know your boundaries or you could end up in a dispute with your neighbors. You could also end up paying taxes on property you do not actually own.
7. Think About The Future
You may have no plans to sell, but you do not know what the future holds. Therefore, it is always best to keep reselling in mind before you buy. If you buy a top-end property, you will have a smaller potential buyer base when it comes to selling it at some point in the future.
8. Stay Detached
You may love the way a house is decorated, but you need to be clinical in assessing if it’s good value for money. Don’t let your heart rule your head.
9. Buy When You Need To
Unless you are buying to speculate, don’t try to anticipate the market. You are buying a home that you will most likely be living in for many years. When you find a home you like and you have the money, go for it. If you wait for prices to fall, you may never get what you want.