Buying a home is a huge commitment – you have to look for a property that would be your home for a considerable period of time. There are lots of information that needs to be sorted through before a purchase is made and a single miscalculation can blow the whole deal.
With so much hanging on the line, due diligence becomes critical – you need to be prepared when tackling the task of buying a home. Before closing the deal on a property, you’d want to get as much information as possible – knowledge is power.
What Not To Do When Buying A Home
Not reading the fine print of the real estate ad
When it comes to real estate ads, you need to read between the lines. Real estate ads are just like any other type of advertisement they are designed to get your attention and make you want to take a peek. So be mindful of lofty sales pitches.
Rushing the process
Individuals approach the homebuying process differently. For some, buying a home is a pretty routine because they know what they are doing and have systems in place for every scenario. However, homebuyers with little or no experience will find the homebuying process challenging. And this can lead to brash purchase decisions – they get overwhelmed and close a deal too quickly. This is a recipe for disaster. Without doing the due diligence, the entire buying process will not be done from an objective view.
Not conducting a home inspection
When buying a home, you should never skip on getting a professional inspection done. It is important that you know exactly what you are paying for -after all, you are spending your hard end cash.
Over bidding at real estate auctions
Getting your dream home at an auction for real estate is possible but this is usually very rare. Although the asking price may be reasonable, it does not guarantee the purchase to be a bargain. There might be a bidding war that can push the price way above market value. Before bidding at an auction, conduct research on the properties to be auctioned and set a bid cap for yourself.
What To Do When Buying A Home
Make purchase decisions based on needs
When buying a home, it is imperative that you consider your long-term needs. For example, on average, most Americans live in the same property for about nine years. So, even though buying a two-bedroom house fitted with a gourmet kitchen might speed suitable for your current lifestyle, if you intend to expand your family down the road, this may not be suitable for your future needs. To avoid buyers remorse, make a list of your needs to guide your purchase and stick to it.
Get a loan pre-approved
It is a smart decision to get pre-approved for a loan before beginning the buying process. Pre-approval is a routine contract that guarantees a specified amount will be granted to you as loan by a mortgage broker or lender. Getting a pre-approved gives you an advantage over other homebuyers who are only pre-qualified.
Check out programs for first-time buyers in your local area
A lot of workplaces and cities offer programs to help first-time homebuyers in a bid to build their communities. To find such programs, you can begin with a check at your local real estate association.
Research the neighbourhood
When buying a home, the neighbourhood is just as important as the house. However, researching a neighbourhood might require some detective work – before you begin your research draw up a list of deal breakers.
Evaluate your needs
Before you buy a property, you would need to know exactly what it is you want out of a property, this would require you to evaluate your needs. For most investors, profitability is a top priority. However, this is determined by the features that come with the property. Because each house would be different, you would need to ascertain which features are important to you. Keep in mind, a feature that can bring up the value of the property in one neighbourhood might bring down its value somewhere else.
Check your credit score
This should be the first step in the homebuying process, this will give you a guide as to what is feasible. Your credit score will determine the terms of your loan. If you check out your score and it is looking low, you might want to put off buying a home and spend time improving your score before contacting a mortgage expert.
By James Cummings
who is Founder and CEO of dailyposts(.co.uk). He is a business psychologist and serial entrepreneur.