Buying a house is possibly up there as one of the most important decisions you will make. But many people plunge headlong into it without proper planning. By a strange twist of fate most people tend to make the same mistakes when it comes to buying a house. Buying a house is good. Rushing into it is not. It pays to research and learn from the experience of others.
The most common mistakes when buying a home are related to finance. This is an important area and cannot be stressed enough. However, there are other aspects to consider as well. Here is a quick list of the seven worst home buying mistakes that should be avoided at all cost.
- Budget: Even before you go out for the first visit, your budget should be carved in stone. Keep the concept of repayment uppermost. Don’t forget the added expenses in the new house. Involve your family in the discussion and take a collective decision. It is so easy to ‘stretch’ the budget a little, but that ‘stretching’ might have severe repercussions in the future.
- The 20% rule: How much cash do you have for the down payment? If it is anything less than 20% of the property value then you are not ready. Truth be told – a down payment of less than 20% means a very low stake in the deal and that’s not a good idea.
- Plan your move: Buying a house may not make sense if you are planning to change towns very soon. If you do make the decision to buy, make sure that the rent can cover your bond if you move and have to let it.
- Location: Never be in too much of a hurry. It is important to consider the location of the property and ensure that is suitable for you. Safety and availability of facilities that match your lifestyle needs are important considerations.
- Inspection: This is not your visit. A property site inspection is a specialist activity where a professional inspects every aspect of the property that you intend to buy. If you skip the inspection and later find that there is a major issue, you will have to bear the costs of repairs.
- Documentation: The simple rule is to write everything down. Assume nothing. Talk about each and every detail, including the furnishings and the equipment and make sure it’s written into the contract.
- Don’t Delay: The greatest mistake might actually be in delaying too much in the hope that a better interest rate, better property or a better deal might materialise. However, advice to be careful is not grounds for not making the move. Think ahead, strategise, and move swiftly.
Now, this last tip seems to go against everything we’ve just told you about being cautious and taking your time.
Homefair’s advice for people entering the property market is that this is a wise decision if managed properly. With careful research and by heeding the experience of others, you will find that you have created a good asset and its value can only increase as the years roll by.