A home is the most expensive purchase you will ever make. Nothing comes close unless you have a penchant for superyachts or Picassos. For this reason, buying property is not something you should rush into. Never buy a home on a whim. Unlike a pair of shoes, you can’t return a house to the vendor and they don’t come with money-back guarantees in the event you change your mind or belatedly discover it doesn’t ‘fit’.
Unfortunately, many homes come with hidden problems. Owners go out of their way to hide issues and buyers lack the experience and/or common sense to practice due diligence. Each time you buy a property, you learn something new about the process, but if you do make a mistake, it could be a very costly mistake.
Buying a home is tremendously exciting. If this is your first home, you probably can’t wait to get the keys from the realtor and start making a nest for your family. Even second and subsequent property purchases won’t lose their shiny newness – unless of course, you are a property developer and you buy and sell for a living. Either way, there is a lot to think about and an awful lot of pitfalls to avoid along the way.
Here are nine things you should watch out for or consider on your home buying journey. Ignore them at your peril!
1. Can You Afford to Buy?
Think long and hard about this one. Home ownership is viewed as something we should all aspire to, but there is little point in investing in a property if it leaves you so broke you can’t afford to eat.
Be realistic about what you can afford – if anything – and don’t start viewing properties until you have been pre-approved for a mortgage. Mortgage companies are more cautious these days. They tend not to lend money to people who can’t afford the repayments. If a lender has pre-approved you for a loan, they have done the math. However, this doesn’t mean you should buy the most expensive property you see. Always factor in the cost of home ownership, which includes maintenance, bills, taxes, insurance, and any other costs you may have to bear.
2. Work with Experts
Some people think they don’t need any help to buy a home. They ignore advice from realtors and look for the cheapest lawyer they can find. The truth is that we can all benefit from some help.
Sure, hiring a professional will cost money – money you might prefer to spend on a new car or vacation – but consider this money well spent. Experienced realtors and property lawyers provide an excellent service. They will help you find the right property and assist you on the rocky road to securing your first home. Inexperienced realtors and property lawyers cause delays and give bad advice. It is tempting to try to save money, but you will soon realize that cutting corners is a false economy.
3. Make a Wish List but Be Flexible
We all have a wish list. Mine includes an indoor pool, basement gym, and a landscaped garden with ocean views. It really doesn’t matter what is on the list; the important thing is to be flexible. Eventually, you will have to compromise somewhere.
For example, say you are desperate for a property with a large garden that is near a popular elementary school because that’s where you want your kids to go. However, it soon becomes apparent that homes with gardens in this neighborhood are too expensive.
In this instance, compromise is the only option. You can either look at properties in a cheaper neighborhood or forgo the idea of a large garden. You can’t have both of them without crossing the red line, so be flexible and willing to drop some of the items on your wish list.
4. Look for Problems
All homes have issues. Even brand new properties are not free of snags. The important thing is to go in with your eyes wide open. Pay close attention when you have the first viewing and don’t let your heart rule your head. It is a realtor’s job to sell you the property so they will gloss over potential problems or not draw attention to them.
Be vigilant and check everything. Are there any signs of pest infestations, leaks, structural problems, difficult neighbors, or anything else that could cost you money or make your life a living hell?
If you spot anything that concerns you, take a step back and consider your options. Even small issues like a non-functioning HVAC system or a toilet that doesn’t flush properly cost money to fix, so now is not the time to view a property with rose-tinted glasses. Instead, think like a professional and seek further advice or walk away.
It is better to hire a professional to inspect the property and put your mind at rest than continue regardless. Read Best Reviews Pest Control Company Charlotte NC or call someone to offer some professional advice.
5. Book a Home Inspection
A home inspection follows closely on the heels of the previous point. Home inspections dig a bit deeper. Problems like termites and subsidence are not always obvious, but a thorough home inspection should pick them up.
Home inspectors look at the fabric of a property, including plumbing, drainage, structure, and wiring. A good home inspector will alert you to any nasty surprises or hidden problems. It is money out of your pocket, but you should consider this money well spent. After all, wouldn’t you rather know if the drains are blocked or the property has been eaten alive by termites before you agree to buy?
6. Take Your Time
Buying a property is not something you should rush into. It is common for first-time buyers to fall in love with a house and want to rush through the process. However, rushing full steam ahead encourages you to gloss over problems.
This is an expensive purchase, so take your time. You should never succumb to pressure from anyone. If a realtor is pushing you to make a bid on a property, take a step back. There may well be other interested buyers, but there will always be other properties. As any expert will tell you, the saying ‘fools rush in…’ is very apt.
7. Location Matters
The location of a property is very important. We have touched on this already, but it is sensible to look at different neighborhoods when buying properties. Popular areas will always be more expensive and quite possibly out of your price range. Instead, find out where up-and-coming neighborhoods are, as properties here will be cheaper, but could gain value in the next few years. Conversely, it is a good idea to avoid buying properties in neighborhoods where prices are falling and local businesses are in decline.
Take advice from experienced real estate agents on this score. They know the local market better than you do. Visit the area at different times of the day and night, so you get a fuller picture of what the locale is like. Some neighborhoods are nice and quiet during the day, but blighted by criminal activity at night.
Look for clues in existing properties; are neighboring homes well cared for with tidy gardens or are they unkempt and shabby?
There is little point in spending money on a beautiful home in a down and out neighborhood, as it won’t offer a good return on investment and sooner or later you will wish you had moved somewhere else. On the other hand, investing in a less desirable property in a good neighborhood could be a smart move. With some time, money and love, you could end up with an amazing home in a great location, which is win-win for you.
8. Is the Property a Good Long-Term Investment?
Think about your long-term plans. You might not have kids right now, but are you thinking of starting a family in a few years? If so, that cute one-bed apartment close to the beach is not going to work as a forever home.
Be realistic about the future. None of us has a crystal ball, so it is difficult to predict what lies ahead, but unless you are comfortable with the idea of selling up and moving on in a year or two, it is better to buy a property that meets your long-term needs, too.
9. Pay the Right Price
Do not be bamboozled into paying over the odds for a property. When we fall in love with a property, the temptation is to pay whatever it takes to make it ours. However, this is foolhardy, to say the least. Now is not the time to let your heart rule your head. Be sensible and only buy what you can afford and what the property is worth. If the vendor holds out for more cash or the realtor is pressing you to up your offer, take a deep breath and walk away.
Homeownership is scary, but as long as you take advice, use your head, and don’t rush into anything, you should be fine.