Looking to buy your first home? It can be one of the most significant decisions of your life. Be sure you are properly educated and are making the right moves to ensure that your house or condo is both a comfortable place to live but also a great investment for your future. These tips can be applied when purchasing your own home or purchasing through the aid of a rent-to-own company.
Here is a list of 10 common mistakes that buyers make and you should avoid:
1. Not using a trusted advisor
Your home will be your greatest asset so you need to ensure that you have done the proper homework. It is critical that you work with a professional such as a trusted real estate representative or a lawyer. Make sure your real estate professional is full time and that they know exactly what type of house and area you are looking for.
2. Wasting time by looking at homes that are not within budget
Before you begin the process of looking for a home, be sure you know what your credit rating is as well as how much of a mortgage you can qualify for. Get a full mortgage pre-approval from your bank or broker, which is a committment from the lender that states the purchase price and your interest rate. This committment is usually guaranteed by the lender for a specific amount of time, usually 90-120 days. Looking to buy a condo? Be sure to get a capped rate up to 18 months for accomodate the construction period for the condo.
3. Buying the wrong house
Avoid buying the wrong house by listing out your priorites and outline the “must-haves and wish-list” for your home. Include things such as desired housing style, number of bedrooms, number of bathrooms, type of parking, fenced yard, proximity to schools, amenities, work, public transportation and highways. Be concise and clear and be sure to stick to your top priorities, it is ok to conceed on some things but you should never conceed on the things that are most important to you. Make a decision you won’t regret in the future.
4. Not hiring a professional home inspector
Trust me when I say that this could be one of the most crucial mistakes that any home buyer could make. A trusted home inspection can help distinguish a home that is a money pit from one that is a great find. Both resale and new homes should be inspected. Inspections will reveal any issues from the foundation to the roof shingles and everything in between. Don’t get stuck with a lemon, you can’t always make lemonade, at least without it costing you an arm and a leg. Also, don’t let anyone talk you into waiving the home inspection as a clause in the offer. In the end, it could become your only way out if the house has real problems.
5. Not bothering to visit the target neighbourhood more than once
To be sure your target neighbourhood is the right fit for you, you should visit the area more than once and be sure to spread out your visits between day and night. An area could look great by daylight but become a scary place at night.
6. Giving in to fear
Fear can be disabling, especially when you are dealing with something like a home purchase that could be out of your comfort zone. There will likely be many scary scenarios that can play out in your head around your purchase and it might just seem easier to continue renting. Keep in mind though that when you rent, you make someone else rich by paying down his/her mortgage while not building equity in your own home. When you become a homeowner, either on your own or with the help of a rent-to-own company, you have a fixed asset and you will be on your way to financial freedom. Be confident in your instincts, they will only steer you in the wrong direction if you don’t believe in them.
7. Not being prepared for closing costs
Buying a home comes with certain expenses. The down payment is just one of them. Many buyers are ill-informed about what additional expenses they have to be prepared for when they purchase. Some of the other costs you should be aware of are legal fees, land transfer taxes, utilities, insurance as well as other costs. For a complete run down of closing costs, please check out this post – http://bit.ly/ift6ht
8. Not understanding the mortgage
Although intimidating, the better you understand the terms of your mortgage, the more it could save you (we are talking to the tune of thousands of dollars). Key factors of any mortgage are your interest rate and amortization. Other things to find out about include what your payment privileges are, whether your mortgage is portable, what your down payment requirements are, insurance needs and if the mortgage is open, closed, variable or fixed.
9. Waiving the finance clause before you have secured financing
This is a definite no-no. If you don’t have the financing at the time you make an offer, do not waive the financing clause just to make your offer stronger. Nothing is ever guaranteed when you purchase a home and the last thing you want to find out is that your financing fell through for whatever reason. Keep the finance clause in the offer until you have a firm committment from a lender. Save yourself many headaches and expense.
10. Not being prepared for moving day
Preparing for moving day is actually a very simple process. Many buyers skip steps or decide to eliminate them altogether which results in a very stressful situation as well as potentially added expenses. Establish a list of priorties for moving day that should include things like contacting utility companies, secured the proper insurance, booked movers, rerouted your mail and finalized all financing. Being prepared can make your moving day one of the best experiences of your life.
Buying, Selling, Leasing or Investing in real estate is sometimes a complex undertaking. Hiring me, a real estate professional will help save you time and money. steven@maislin.com
