17 July 2017

6 of the Worst Mistakes All First-Time Home Buyers Make

So, you are in the process of buying a new home for the first time and it is exciting. There is nothing like investing thousands and signing a twenty-year contract to get the blood pumping! But, there is an element of fear under the excitement. Why? It’s because buying a property is a big deal and you don’t want to get it wrong. After all, you are a novice so it isn’t out of the realms of possibility. Plus, like every investment, there are pitfalls which can bring you to your knees.

All you can do is to try and avoid them as best as possible. But, how you choose to do that is important. Some people like to plan the details, whereas others hire experts to pitch in. To help out, this post is going to show you the mistakes others make. After all, hindsight is 20/20.

Mistake #1 - Buying the First Property You See

It is unbelievable how many people come across a property and end their search. Sure, there is a chance that it will be the dream home you are looking for, but you will never know. The reason for this is that you need to widen your search. By assuming that this is the case, there is a good chance that another house exists which fits your needs perfectly. As a result, you have to conduct a thorough search even if you think you have found the one. To do this, view as many properties as possible from a new condo launch to a new apartment launch. At the moment a house will seem like the perfect alternative, but you never know until you have a look. Anyway, there is zero harm in viewing a property.

Mistake #2 - Agreeing to a Bad Mortgage

Now, the odds of knowing what constitutes a good mortgage are not high. Let’s face it –the average person doesn’t deal with these loans on a daily basis. However, that is why it is essential to research the tricks of the trade. For instance, banks love to sanction big mortgages for people with great credit. So, if you are one of these people, they may offer you a lot more than you need. Already, this is a bad deal even if you can afford the repayments. In the end, it is going to cost you more than it should, and that isn’t necessary. What is needed is a loan which is affordable and within your budget, and one you can pay off in the next century.

Mistake #3 - Forgetting About Future Expenses

Of course, a mortgage is the biggest cost that a homeowner has to consider, yet it isn’t the only one. Being a property proprietor means paying up every month, and some costs will take you by surprise. Consider tax for a moment. Did you know that you have to pay property taxes? It is obvious when you say it out loud, but it isn’t something that springs to mind during the process. As such, high rates can catch people out when they finally move in. Or, what about a home insurance policy? Okay, so it isn’t mandatory, but it is a necessity if you want to keep all your valuables safe. Lastly, every home needs repairs from time to time, and they can range in price. For some people, these can put them over the edge and turn a dream home into a nightmare. Therefore, you need to think of all the costs in advance.

Mistake #4 - Compromising

Usually, you won’t find anyone that has a bad word to say about compromising. But, this is property investment and it isn’t a normal industry. Quite simply, no one should settle when it comes to their needs. Only you know what your needs are and if everything is on track. Do you plan on having kids? What about schools? These questions need answering beforehand as they affect the final decision. In simple terms, there is no reason to concede and buy a two bedroom house if you plan on having a family. Also, don’t purchase anything that will affect the kid’s chances of going to a good school. Some things require compromise, yet other features are non-negotiable.

Mistake #5 - Lacking Vision

On the flip side of the argument, you aren’t going to find a house with all the trimmings. If you do, not only are you lucky, but you’re also going to spend a lot of money. The less time-consuming and inexpensive option is to buy a house and turn it into a home over time. However, you have to have the vision if you are going to make this tactic work. Anyone that thinks that any little problem is a major issue needs to rethink their plans. Otherwise, it is going to be a while before you can set a move in date. Don’t worry because you don’t have to do it alone as contractors will do the heavy lifting. Still, you need to be able to give them the plans so that they can bring them to life. Also, remember that vision is a long-term game. As such, it is sometimes better to put up with existing features in the short-term for long-term gain. All you need is a small amount of patience.

Mistake #6 - Not Haggling

Seriously, far too many people offer the asking price when they bid on a property. The reason this is wrong is down to the dynamics of house hunting. The asking price is the amount the sellers want, but it isn’t one they think they will get. As such, there is a lower price they will accept because they are realistic. From your point of view, this means you should never offer too much. Otherwise, you will never find a house in your budget and cut back on the costs. The key is to start low and work your way up to a mutually beneficially number.

Now you know what they are, don’t make the same mistakes like everyone else.