Buying a house is a big decision, both emotionally and financially. Having a place to call one’s own is often a big dream to achieve and when you are finally knocking on that door, it can be a really emotional and at the same time, exciting, experience. Financially, it is one of the biggest purchases a person can make in a lifetime. Houses are typically bought on credit, spanning a repayment period ranging anywhere between 20 to 35 years. Needless to say, there is scope for making some serious missteps that can have far reaching consequences in one’s life. Here are the six most common mistakes inexperienced or first time buyers make and how to avoid them.
1. Not Looking Enough
House hunting can be tiresome. Poring over brochures and engaging in lengthy conversations with real estate agents is nobody’s favourite way to spend their free time. But like everything worth doing, this too is necessary. It is not easy finding a house that you like within the budget you have. The biggest mistake novices make is buying a house that they are not “excited” about in a hurry and only live to regret the decision. The costs you might incur in relocating are a totally avoidable expense that could have been sidestepped if only you had been a little more patient and waited for a better opportunity to come your way.
2. Straying From Your Budget
Falling in love with a house at first sight is not unheard of, but in almost 90% of cases, that house is typically the one that is out of their budget, and by a sizeable margin. When it comes to making one of the biggest financial decisions of your life, you cannot afford to be emotional. Stay practical and make your budget your foremost concern. Arrive at your number after putting in sufficient thought and stick to it no matter what. Do not “fall” for a particular house and buy beyond your budget. 35 years are a long time to pay off an impulse buy that will mess up your finances for years to come.
3. Do Not Rush
Often agents will employ tactics like telling you about other interested buyers in an effort to rush you into committing to the house. But there are many more things to consider beyond the purchase price: possession dates, required maintenance, pending repairs. These are things that you typically do not consider when buying a house but these will rear their heads once you have committed yourself. Better be safe than sorry.
Real estate used to be murky field where prices were closely guarded secrets and the agents had their way with buyers. But with the advent of the internet, it has become really easy to compare prices in surrounding areas. Do your research about the going rates of sales happening nearby or in the area before you accept an offer. Make sure you bargain to what you feel is a fair price for the house in its condition. If it needs repairs or maintenance post purchase, use it as leverage to drive the price down. Do not get sucked into a bidding war if the agents tell you tales of other interested buyers in an effort to get a higher offer out of you. Stand your ground.
5. Consider the Ramifications of Ownership
Depending on your individual situation, buying a house might not be the right decision for you in the first place. Renting has many benefits that you might overlook if you get caught up in the fantasy of owning a home. There are many things that you will need to concern yourself with when you are homeowner that you do not need to if you rent, viz. property taxes and maintenance, the latter of which can easily balloon into huge amounts.
6. Do Not Drag Your Feet
Be cautious, but do not stretch out the process unduly. Sometimes, the agent really does have other buyers lined up. You must not rush the decision, but you must balance forethought with promptness as well. If you are certain you are getting a good deal and you have done your homework, do not hesitate to confirm. You have made a decision, be satisfied with it.