House Hunting Mistakes
7 Top House Hunting Mistakes
Buying a home is a very emotional process. If you allow those emotions to get the best of you, you may fall prey to a number of common home buyer mistakes. Since homeownership has far-reaching implications, it’s important to keep your emotions in check and make the most rational decision possible.
Not Shopping Around
While you should be realistic in your search, and willing to compromise to some degree, don’t cave on important things.
For example, don’t get a two-bedroom home when you know you’re planning to have kids and will want three bedrooms. It’s true that you’ll probably have to make some compromises to be able to afford your first home, but don’t make a compromise that will be a major strain.
Being open to continuing your search will save you from making rash decisions you might regret later.
Overlooking Important Flaws
Look for homes whose full potential has yet to be realized, especially if you’re on a strict budget. The bump in equity from your upgrades will help you to move up the property ladder.
That being said, if you’re going to buy a house that needs work, don’t buy a fixer-upper that’s more than you can handle in terms of time, money, or your own ability. For example, if you think you can do the work yourself then realize you can’t once you get started, any repairs or upgrades you were planning to make will probably cost twice as much once you factor in the labor.
Rushing to Put In an Offer
In a hot market like it is today, it may be necessary to make an offer fast if you find a home you like. However, you have to balance the need to make a quick decision with the need to make sure the home will be right for you.
Don’t neglect important steps, such as making sure the neighbourhood feels safe at night as well as the day (try to visit at different times), and investigating possible noise pollution issues like a proximity to main roads.
Ideally, you’ll be able to take at least a night to sleep on the decision. How well you sleep that night and how you feel about the home in the morning will tell you a lot about whether the decision you’re about to make is the right one. Taking the time to consider the decision also gives you a chance to research how much the property is really worth and offer an appropriate price.
Dragging Your Feet
It’s a tough balancing act to make sure you make a careful decision, but don’t take too long to make it. Losing out on a property that you were almost ready to make an offer on because someone beat you to it can be heart breaking. It can also have economic consequences.
If you don’t pull the trigger quickly, someone else might, and you’ll have to keep looking. Don’t underestimate how time-consuming and routine-disrupting house shopping can be.
Offering Too Much
If there’s a lot of competition in your market and you find a place you really like, it’s all too easy to get sucked into a bidding war — or to try to pre-empt a bidding war by offering a high price in the first place. But there are a couple of potential problems with this.
First, if the house doesn’t appraise at or above the amount of your offer, the bank won’t give you the loan unless the seller reduces the price or you pay cash for the difference. If this happens, the shortfall on your bid as opposed to your mortgage will have to be paid out of pocket. Second, when you go to sell the house, if market conditions are similar to or worse than they were when you purchased, you may find yourself upside down on the mortgage and unable to sell.
Make sure the purchase price for the home you buy is reasonable for both the house and the location by examining comparable prices.
Neglecting to Inspect
That’s why you need a thorough inspection of the property by certified structural engineer. Keeping your feelings in check until you have a full picture of the house’s physical condition and the soundness of your potential investment will help you avoid making a serious financial mistake.
You found the perfect place, your offer was accepted, and you’re in contract. Before you close on the sale, you need to know what kind of shape the house is in. You don’t want to get stuck with a money pit or with the headache of performing a lot of unexpected (and potentially expensive) repairs.
Getting Desperate
When you’ve been looking for a while, and you do not see anything you like—or worse, you’re getting outbid on the houses you do want—it’s easy to get desperate to find your new house now.
If you have time on your side, it’s okay to wait until something that suits you comes along. As long as your demands are realistic for your budget, you are bound to find something you can live with. New houses come on the market every day.
Buying a house is a big decision, but it does not have to be difficult. However, since it’s so natural for emotions to come into play, you need to ensure you are making rational choices, rather than getting wrapped up in the notion of a dream home—or conversely, of yourself as a master builder/renovator. If you’re aware of the issues ahead of time, you can protect yourself from costly mistakes and shop with confidence.
In short, when it comes to buying a new home, be realistic, take your time, don’t act on impulse, and, ultimately, make a home-purchase decision that’s good for both your feelings and your finances.
Article was adopted from the article in the link below.
