Mistakes to Avoid While Buying a Property - The Finance Site

Mistakes to Avoid While Buying a Property

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Mistakes to Avoid While Buying a Property

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While buying a new home is one of the biggest investment people make in their life and can be a great asset for you and your family, the whole process can be an exciting yet daunting task especially if you are first home buyer with little or no experience in the market.

HERE ARE SIX COMMON MISTAKES THAT HOME BUYERS MAKE AND HOW TO AVOID THEM

1. Not Doing Enough Research

To be able to know whether you are getting a good deal or not, you need to be able to do a thorough market research of the suburb you intend to live in. To be on the safe side, you need to research as many properties as you can and decide on your preferred home in not more than twelve weeks. 2-3 months is a long enough period for property prices to shift. If you are really serious about purchasing a home, then investing the time to do a market comparative analysis will not only help you understand the market value of the property you intend to buy saving you thousands of dollars, but will also give you an upper hand when negotiating the final price. If you don’t then the selling agent might beat you at the game.

2. Not Having Financial Approval

There is nothing as emotionally draining like seeing your dream house slipping away to another buyer just because you are unable to finance it. Using online home loan calculators to find out how much you can borrow and having the loan approved are two different things. To avoid being on an emotional roller coaster, as a homebuyer you need to shop for a lender and have your home loan pre-approved before you go out to house hunt. This will help guide you on which suburbs you can house hunt in and what price range to look out for.

3. Stretching Your Finances

A good number of buyers tend to fall in love with properties that are way beyond their finances, leaving them hurting and unable to properly budget their finances. Don’t make the same mistake. When shopping for a home, a rule of thumb is to make sure your monthly repayments do not cost you more than 25% of your family’s net income. Another thing to consider is putting up the 20% deposit which helps you avoid the mortgage insurance.

4. Not Doing All the Building Inspections

For your peace of mind and to avoid spending extra money once you have moved into your new home, you need to obtain all the appropriate inspections. It is always advisable to engage a competent and independent professional to check out your new home. This will help you avoid moving into a home with termite infestation, sub standard renovations among other things.

5. Buying Without Going on Site

Buying a property without having a firsthand look is a recipe for disaster. Doing virtual tours on different websites can be exciting but unless you go onsite you might end up purchasing a rundown home believing it’s beautifully renovated. If you are going to spend your hard earned thousands of dollars, then you should definitely create time to check out the property in person and verify what is being sold to you on the web is indeed the real deal.

6. Unclear Protection Clauses in the Contract

Before signing the contract, ensure you have read and understood the entire contract and you are well protected. Don’t be fooled by an agent who is in a hurry to seal the deal into believing that the contract can be modified once it has been signed. The only way to make changes to the contract late on is doing away with the current contract and renegotiating a new one and in this case the seller may not agree to your requests.

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