Home buying may seem uncomplicated when it is a well-thought out and well planned exercise. But naïve home buyers make mistakes time and again which can be serious enough to jeopardize a large investment. A bit of caution and a careful scrutiny can prevent falling into traps and mistakes can be avoided. The following list is some common mistakes to avoid put together by Green Door.
Ten common mistakes
- Insufficient research- A buyer in a hurry is the buyer who makes mistakes. Property is a big investment and the final decision must be based on extensive research about options available, the best locations, the problems found in certain localities, explore neighborhoods and neighbors, price trends and expectations, and so on. Extensive research helps in making choices and decisions that are not regretted later.
- Not knowing current price trends- When the idea of buying a home first appears, the first thing to be considered is current price levels and whether they match affordability. Without checking from multiple sources, and believing a single source, is being foolish and you might just be taken for a ride. Additionally, if prices are on an upswing, a quick decision may help, while a declining trend may require you to wait till they fall further.
- Not selecting the right agent- Real estate agents come in all moulds, good, bad and unscrupulous. Sellers agents will wish to get the highest price to earn a higher commission, and ensure the property private sale closes quickly before the customer changes his mind. As a buyer, a wrong agent may push you to buy a house that may not be the best for you. Or even make you pay more, when you could have easily closed the deal at a much lower price.
- Not taking the right mortgage- Most buyers use the mortgage route to buy a home and a preapproved mortgage is preferred by sellers as well. This often makes mortgage choices a rushed affair without a thorough evaluation of options available, lower rates, paying off mortgages sooner and so on. Once taken, you are stuck with the mortgage, even if it is a regrettable choice.
- Not carefully inspecting the property- Before making a down payment for property, it is always advisable to get a professional to inspect it for problems, defects, urgent and serious repairs and so on. Even a careful inspection yourself will reveal these. It would be foolishness to book the place without this scrutiny.
- Trusting blindly- If you are the kind who trusts easily, it may cost you dearly to place your trust in a broker or seller without verifying credentials and the deal being offered. This may lead to making bigger commitments at rates higher than those prevalent, or paying more for a property of lower value.
- Forgetting about long term returns- Often, quick decisions mean making a commitment without evaluating the long term returns on a property. Liking a place may spur such decisions, but for all its beauty, its location, size, and other features may not yield long term appreciation of investment.
- Resell option not considered- While homes are bought with a sense of permanence in mind, the resell option must always be considered-since transfers or relocation can never be ruled out. Ending up with a large investment that cannot be resold can make relocation difficult if not impossible.
- Blindly accepting terms- Written agreements have a long list of terms, which must be scrutinized and discussed by both parties, to rule out mistakes, errors and other unacceptable clauses.
- Making impromptu decisions without thinking through- Such rash decisions are bound to saddle you with a wrong home and a lifelong regret for not having explored other options.