Buying your first home or investing in real estate for the first time is a milestone, so it checks out that you are excited. House shopping is fascinating, but you shouldn’t let your emotions override your rationality. Buying property means that you are ready to settle, but you need to realize that there is a time and place for that.
Buying your first home or investing in real estate for the first time is a milestone, so it checks out that you are excited. House shopping is fascinating, but you shouldn’t let your emotions override your rationality. Buying property means that you are ready to settle, but you need to realize that there is a time and place for that. You are going to be stuck with the mortgage for many years to come and you never know what the future holds. If you want your first real estate purchase to be a smart and profitable venture, avoid making these rookie mistakes:
1. Focusing on Flashy Details
Do not get distracted by some fancy décor or be appalled if the house looks a bit shabby on first glance. Minor flaws like peeling paint, dusty interior, old-fashioned furnishings, or an overgrown backyard are inexpensive to fix. You should be looking out for structural pros and cons to determine the integrity of a house. A leaky roof, faulty electric/plumbing system, or damaged flooring can be quite costly to fix. Focus on the durability, roominess, and overall design instead of things like shiny fixtures and presented color scheme.
2. Rejecting excellent options in the search of perfection
It is a good thing to know what you are looking for, though it is necessary to be realistic. If a house offers 7 out of 10 things on your list, it’s a pretty good find. The chances of discovering the place of your dreams are slim, so don’t dismiss promising listings over trivial reasons.
3. Rushing into a deal
Contrary to the last point, rushing into buying a property is no good either. If you feel hesitant about a listing or don’t feel confident about any of your explored options, perhaps taking a break is the right thing to do. It is possible that you are simply unprepared for this commitment or you need to do more research before continuing the hunt.
4. Paying the lowest possible down payment
A good time to invest in real estate is when you have enough funds to pay 20% in down payment and less than 50% of your gross monthly income can cover all ongoing housing costs. The lesser you allot to down payment, the more you pay in interest over the years. A bigger down payment allows you to gain equity faster and save a great deal on total cost.
5. Shopping when already under substantial debt
If you are already under a massive amount of debt, taking a new loan to mortgage is not a wise move. This will only lead to increase in your monthly expenses and you won’t be able to catch up with all the payments. You might be driven to a point where you struggle to make ends meet. You need to pay off previous debts and gain financial stability before investing in real estate.
6. Not involving a Professional
Real estate fraud is a common thing and rookies are the main targets. If you have no prior experience with real estate sale and purchase, seek the services of an expert like Real Estate Attorney Haveford, PA. They will handle all the paperwork for you, negotiate on your behalf, and protect your interests at all times.
7. Ignoring Resale Value
Many first-time property buyers do not consider resale value because they are looking for a forever home. However, times change and the average home owner wants to sell after 7-10 years; some people want a bigger home because the family has expanded, others need to move for work, etc. Buy a house in a popular or developing neighborhood, since it would be easy to resale or rent it out in the future. Investing at a location that is scarcely populated, unsafe, and void of employment opportunities is not a good bet.
8. Going over budget
Inexperienced buyers often have a habit of falling in love with the very first house they see or falling head over heels over a property that is way out of their range. They tend to get obsessed with the property and risk everything to take it. Sooner or later, they realize their mistake and have to let go to overcome crippling debt.
9. Buying without conducting an inspection
A professional house inspection will cost a few hundred bucks, but it will save you from a lifetime of regret and a waste of thousands of dollars. The inspection will reveal deep rooted or hidden issues with the real estate, so you know exactly what you are signing up for. If serious issues are found, you can demand for a discount, ask the seller to fix everything first, or change your mind.
10.Finalizing a house without seeing it in person
Never complete a transaction without physically visiting the listing first. Pictures or photographs can be deceiving, so never make this mistake. Once you’ve finalized a deal and put down your first payment, there’s no going back.