Because of the relatively low interest rates and real estate prices, most people are planning to invest on a house. When the market is doing great, there is usually a lot of competition among the home buyers. Generally, a house is the biggest investment made by an individual in his life, hence it should be done extremely carefully after proper analysis.
Since there are many rules and complexities associated with buying a new home, it can be quite a challenging task. If you make any mistakes, you may regret it for the rest of your life. The most common mistakes every person makes while purchasing a home for the first time are:
1. NOT MAKING A PROPER BUDGET: Buying a house can be pretty expensive and most people are forced to take a loan. Every month you will have to pay a certain amount of money to the bank. Before making any decision, you have to carefully analyze your present financial situation and prepare a budget after considering all the incomes and expenditures.
2. NOT CONSIDERING RESALE VALUE: Generally, when people buy their first house, no one really thinks about the resale price. But a lot of changes may happen in the future; you may get transferred to another city, your children will grow up and probably move out. In case of any emergency, you may also need to sell your house for urgent cash. Hence, if you think about the resale value of the house while buying, you may save yourself from potential troubles in the future.
3. NOT CHECKING YOUR CREDIT SCORE BEFORE TAKING A LOAN: Most people are unaware about their current credit rating. If you have a decent credit score, then getting a loan will be very easy and the interest rate will also be favorable. Sometimes, the credit scores are also incorrect. Before applying for any kind of loan, make sure that there are no errors in your rating.
4. TRUSTING ORAL AGREEMENTS: Although, an oral agreement may work sometimes but they are extremely risky. Many buyers suffer because of this. There are many agents who will trick you into entering into a verbal agreement with them and will claim later that no such agreement was made. You don’t have any evidence, so you won’t may be able to do much about it. Hence, whenever you reach any agreement with your seller, make sure that you get it registered.
5. SKIPPING THE HOME INSPECTION: Most people don’t bother to go for a detailed investigation. They just visit the property once, and then decide to buy it. But a clever homeowner may successfully hide all the defects within the house. Hence, it is very important that you hire an expert who will investigate the property carefully. If major renovations needs to be done, then you may compel the homeowner to pay for it or you may reduce the price of the property.
6. BUYING WITHOUT ANALYZING THE MARKET CONDITIONS: Most people don’t study about the market before buying their first home. The real estate market is always fluctuating. You should always try to buy a house when the demand for properties is less. You will be able to get a decent price. Do some research or you can also consult an agent to hep you in this matter.
7. NOT HIRING A BUYERS AGENT: Most people make this mistake. If you are buying a home for the first time, getting a good agent is extremely important. You should be able to freely communicate with him and share your concerns with him. There are different kinds of agents. You should always go for a buyers agent. A buyers agent will only represent you and not the seller. He will make sure that all your interests are met.
About the author: This article was written by Romeo Demes, who works for a European real estate and renovation company. Useful information for this article were provided by the real estate experts from Terra Dalmatica, who are the leading real estate agency in Croatia and know from experience what kind of mistakes home buyers usually make and how to avoid them.