Avoid These 10 Common Mistakes When Buying Property

Avoid These 10 Common Mistakes When Buying Property

Oct. 16th, 2009
in Real Estate
by ElizabethMcLachlan

Most of the mistakes made when purchasing a home often results in problems that are hard to rectify. To ensure that you don’t have to life with the consequences of your own bad judgment, look out for these common mistakes made when purchasing property:

Mistake #1: Grabbing the First Loan You are Offered

Shop around until you’ve found the best deal and talk to professionals, friends and/or real estate agent for referrals. Make sure you get all your quotes on the same day at around the same time, as interest rates might differ from day to day.

Mistake #2: Getting the Location Wrong

Location is everything and you don’t want to go wrong here. Once again, consider all your needs such as the area’s proximity to your place of work, public transport, schools etc. and make sure you pick the area for the right reasons. Also look at future development in the area to ensure that you investment is secure.

Mistake #3: Not Using the Services of a Real Estate Agent

To refuse the services of an experienced agent is a mistake that a lot of buyers make. They forget that an agent is used to handling transactions, negotiating and has knowledge of property prices in the area. Good agents have the ability to keep things in perspective and help you to be rational when things get too stressful.

Mistake #4: Getting the Price Wrong

Your agent will assist you in getting the price right by, among other things, comparing the house prices in the area. Again, this shows the importance of using an agent.

Mistake #5: Buying Beyond Your Limits

You will always find buyers purchasing a property, which leaves them without any disposable income, as they are unable to deal with the monthly down payment as well as other costs like insurance, property tax etc. Avoid this common mistake by carefully calculating how much home you can afford. Choose a maximum price and stick to it.

Mistake #6: Being Overhasty

There are a lot of emotions involved in purchasing a home, which can lead to buyers jumping into a deal prematurely. Be prepared to spend a lot of time house hunting to avoid disappointment.

Mistake #7: Passing on the Inspection

As a buyer you might feel that you are qualified enough to sniff out any problems. Unfortunately this can cost you dearly. Be smart and get a qualified property inspector to check the property before you buy it.

Mistake #8: Over Spending Before Closing

Taking on debt before closing the deal might mean that you no longer qualify for the mortgage. Rather wait till after the closing before you start buying new furniture and other essentials for the new home.

Mistake #9: Not Reading the Contract

Property contracts can be confusing and hard to grasp, but it is essential that you know what you are committing yourself to. Make sure you understand all terms and conditions and ask for advice if you are unsure of anything. Never just sign on the dotted line.

Mistake #10: Not Budgeting for Closing Costs

Remember to budget for closing cost (attorney fees, recording fees, survey fees, brokerage commission etc.) and remember that you will always have hidden cost, whether it is interest rate hikes or personal financial requirements.

Buying a property has its fair share of ups and downs but can be a pleasant experience if you look out for the common mistakes made.