Regular Mistakes Home Buyers Make
Common Mistakes and How to Avoid Them - Vie Financial
Owning your own home is a classic ambition. It is on the list of typical rites of passage that are meant to signal a shift in your status marking you as a full-fledged adult.
As exciting as purchasing a home is, many potential homebuyers discover that what looked easy and fun online, feels stressful and difficult once the process begins. Do not let the details and confusing lingo surrounding the home buying process overwhelm you. We can guide you through purchasing your home and make the process enjoyable.
Definite Don’ts for Prospective Purchasers
No matter if you are planning on buying your very first home or your 14th, there are always a few pitfalls along the way. Save yourself time, aggravation, and money with some helpful advice from the pros.
Do Not Go It Alone
Many buyers come to us filled with angst and regret because they mistakenly believed that they did not require any professional guidance during the home buying process. There are several important junctions you will reach when buying a house where a seasoned professional in your corner will be a big advantage.
Obtaining a Loan
While you are free to go to a slew of lenders, remember that every inquiry leaves a mark on your credit history. A mortgage professional has leads and contacts that you do not; this allows them to get you a better rate with less strain on your credit report.
Negotiating the Terms of the Sale
It is human nature to avoid confrontation and conflict. Many home buyers cheat themselves in an attempt to be polite. On the other hand, some clients lean the opposite direction and view the seller and their representatives as the enemy. While courtesy is essential in all areas of business, a professional will have experience walking the fine line of guarding your best interests and being civil.
Calling out Inappropriate Practices
While we hope that those who do business with us are upright and just, the unfortunate truth is some seller representatives will go to great lengths to come out on top in a deal. A professional who has experienced hundreds of property sales will know if something is amiss and can request that the seller remedy the situation.
Avoid Underestimating Costs
In a perfect real estate transaction, all of the numbers you have in your head will mesh seamlessly with the numbers on the table. Unfortunately, this is exceedingly rare. Many buyers slip in over their heads because of unrealistic cost estimates. In this situation, talking with a person familiar with everyday costs such as an agent or even dear old Dad can enlighten prospective buyers about real-world expenses of homeownership. Here are some fixed prices that come with purchasing a property.
Inexperienced buyers often underestimate the cost of stamp duty, or they fail to consider it. This is a property tax collected by all Australian states. The amount you pay depends on loan purpose, the purchase price of your property, and the location of your property. While individual amounts vary, it is quite common for stamp duty to cost upwards of ten thousand dollars.
This is the fee paid to the professional who is transferring your property purchase. This typically costs about 1,000 to 2,000 dollars depending on the complexity of the transfer.
Lenders Mortgage Insurance
This insurance is in place to protect the lender if you default on your loan. This only applies to those home buyers who do not have a 20 per cent down payment.
Fees for Inspection
Whether you are buying a property to flip or plan on meeting your first grandchild on the premises, be sure to have the building checked for structural integrity and the presence of pests. These inspections usually cost between $300 to $500 depending on location.
Insurance for the Home and Contents
Your insurance costs will vary based on the amount of coverage, costs to replace the contents and structure, and the location of the property.
When purchasing a home, you must plan on paying loan application and mortgage registration fees.
It may be tempting to rush headlong into the buying process. However, sellers and their agents see you as a better prospective buyer if you can show that you have financial backing ready.
Rushing Through the Research
It is easy to become caught up in the thrill of searching for the perfect house. However, it is essential for you to spend an adequate amount of time researching. Here are several points to consider when you believe you have sufficiently researched home buying.
- Laws Australian property law varies and can be prohibitively complex. Delving into the finer points can save you money in the long run.
- Essential Data It is not difficult to get a copy of specific information about the home you are interested in buying. It is also helpful to gather data about recent home sales in your target area.
- What are you Really Looking to Buy Many people in the real estate business say their clients are not purchasing a property, but instead they are purchasing a lifestyle. Take some time to consider the motivation behind your decision to buy and the life you imagine.Do you need a home with extra bedrooms to accommodate children in your future? Is quick access to public transportation a necessity?
Are you looking for a neighbourhood with young professionals who have similar interest? Once you understand yourself and your motivation, finding the right home will be more comfortable.
This is a tight area for many potential homebuyers. Because you are buying so much more than a piece of land and a building, it is easy to be swept away by excitement when you find a property seeming to be the right one. Allowing yourself to become emotionally attached is a mistake because it makes you vulnerable.
Understanding a Salesman’s Objective
The seller’s representatives will spot your extreme enthusiasm. There is a chance that your excitement can be used as leverage when negotiations take place. Above all, remember you can walk away. Along with emotional expression, there are a few other issues prospective home buyers encounter where restraint and logic will help you avoid problems.
Holding on Too Tight
Stubbornly refusing to see problems, especially when a home inspector highlights a home’s shortcomings, will hurt you in the long run. Save yourself from years of expense and regret; if your inspector says buying is a mistake take the advice and walk away.
Wearing out too Quickly
House hunting can be exhausting and frustrating. If some time has gone by and you have not discovered the right home, do not fall into the trap of buying the next property that might make an ok home. Settling for just any home is akin to cutting off your nose to spite your face. Even if you are a person with a very low interest in beautiful and fancy houses, choosing the right home to buy is more important than just finding any place to call home.
Beware of Overextending Your Self
It is common practice for lenders to pre-approve you for an amount that is greater than you could afford if including all of the real-world costs of living. It is critical that you plan for many expenses as well as unexpected events capable of altering your financial future. Expenses you must consider as a part of the purchase of your home include:
- Utility Bills
- Council Rates
- Food and Entertainment
- Unexpected Health or Employment Crisis
- Repairs of Home or Auto
Minding the Market Too Much
The media is full of messages about the real estate market. Many of these messages are mixed or contradicting, adding to the potential for your confusion. There will always be nay-sayers predicting gloom and doom in the housing market just as there will still be those who paint rainbows and silver linings. Ultimately, your best time to buy a house is when you are ready, financially, emotionally, and physically. Always temper market advice with real-world truths.
Failing to See Potential
It is true that first impressions matter, whether it is in relationships, business, or real estate. However, it is often worth your time to look beyond some unattractive landscaping or an obnoxious carpet. If a house with solid structural integrity, a good location, and a fair price has cosmetic problems, do not make the mistake of immediately writing it off.
When looking for a house, remember these critical points and learn from others’ mistakes.
Introducing Jesse Medwin of Vie Financial Launceston
Franchise Principle of the recently opened Launceston office, Jesse brings with him over 8-years of experience in the financial services sector, a wealth of industry knowledge, and a proven track record for establishing and maintaining long-term customer and referral relationships.