The purchase of a home is an important step that we do and we must be completely sure. From the first step of searching for the perfect home to the formalization and signing of the mortgage and deed, it is easy to make mistakes. Buying a home is probably the most important financial decision for a person’s faces throughout his/her life. The lack of experience can lead to overlooking some fundamental factors to consider when buying a new home.
In this period of crisis, if you want to buy a cheap home, it is better to follow some basic rules so as not to commit an odd number. But how do you avoid these? Here are the mistakes to avoid when buying a home.
And therefore, we have made a small list of the most common mistakes we make when we buy a home.
Before starting to think about taking out a mortgage, it is necessary to establish a realistic budget and know what the maximum is an amount that a person can use to buy a home. Once the budget is established and the search has begun, it is necessary to stick to it and discard the options that are outside the buyer’s possibilities.
When hiring a mortgage it is necessary to have a stable financial situation. Experts recommend that indebtedness due to financial obligations does not represent more than 35% – 40% of a person’s monthly income.
Override the additional expenses – The purchase of a home entails other associated expenses in addition to the mortgage that the buyer must take into account. Among them are expenses such as a notary, property registration or taxes such as VAT. In addition, also consider other fixed expenses that the owners will have to assume such as the garbage rate or the community fee.
Skip details during the inspection- The day of the visit is decisive. When the time comes, it is convenient to go with a detailed list of the things that you want to review to avoid unpleasant surprises in the future. The best option is to hire a professional inspector who is responsible for corroborating the condition of the home and identifying possible defects. It must be taken into account that once the sale has been signed, the damage that the home has and its corresponding arrangements become the problem of the new owner.
Don’t know your limits- Love blinds you, even when it comes to real estate love at first sight. When looking for a property, you will quickly start to compare the areas of the kitchens, the tiles in the bathroom or the orientation of the garden. And we often tend to make development projects for a budget still unknown, and which may prove un-payable. Think carefully about what you can afford to buy before you fall in love with a home that could turn into a bottomless financial pit (s).
Let your emotions show- When you have found the (affordable) home of your dreams, do not show too much enthusiasm. Even if you’re crazy about it, don’t show it to the seller. Otherwise, you will not be able to negotiate a price lower than the asking price.
Underestimating the costs of housing- When buying a home, it is not uncommon to reach or even exceed the set financial limit. Before estimating the total cost of a home, you will need to consider repairs, supplies, or costs. Damaged gutters can mean replacing the roof. In developing your budget, allow for a margin to deal with this type of work. Each year, try to save 1% of the total value of the home for unforeseen costs.
Fear of negotiating the price- This error is very common and is something that people usually regret over time. You should never be afraid to negotiate the price of housing. Putting away shame can mean a significant reduction in price.
Underestimate (tax) charges- Most people know the tax advantages of homeownership. Unfortunately, certain charges are not always taken into account sufficiently. Registration fees, notary fees, cadastral income, property tax, additional cents. These are terms that you have probably heard, without giving them importance. But you should include them in your cost estimate. A commune is not the other, a district is not the other. Even the sidewalk opposite could be more interesting financially.
Think that your first offer will be accepted- Even if prices have fallen, it is unrealistic to think that your first offer would be accepted without discussion. You will probably be entitled to a few rounds of negotiation. A motto that is often confirmed: “by persevering, you get to everything”.
No longer knowing how to distinguish- Avoid getting too excited. If you are at a stage where all the defects seem minimal to you (you can easily fill the cracks, the water in the cellar will dry out in summer, etc.). It is better to call a professional for a particular issue. Or at least to someone you know who can look at the property without being directly concerned by the purchase.
Too much, too fast- If this is your first home purchase, it will likely not be the last. Think long term. Building the pool you’ve dreamed of since your childhood may not be right away. This can also be done later, possibly during another purchase. And even more so today, where we do not yet know how the real estate market will evolve. Avoid carrying large costs without being certain of their real added value. A designer kitchen, a garage, a veranda, a terrace, an open fire, a swimming pool, a garden shed, additional land. If you really need all this, so make sure you live there comfortably and spread out major purchases and work overtime. Your wallet and your motivation will be better.
First the wishes, then the needs- You should give more importance to needs than to wishes, especially if this is your first home. If you don’t already have a job, wait until you have one so you can assess what you can afford. Do you have kids? Try to find a place that works for them. Do your grandparents take care of your children after school? Look for a place near the school. Are you looking for accommodation that suits you for years? Think of proximity and mobility to public transportation. By preparing your list of arguments, you will know what to choose: the city / the countryside, an apartment /home, a very specific region. It is only after that you can start your research.
Good loan, the bad balance outstanding insurance- Most people are used to comparing the offer of several banks before making a decision. And of course, it will be the one that offers the most attractive rate that will prevail. But beware of the ancillary products which could cost you dearly: savings account, balance outstanding insurance, fire insurance, provisions, etc. Furthermore, you are not obliged to take out fire insurance or remaining balance due from the same bank. You can negotiate these contracts with other banks or brokers.
No insurance against loss of income- Monthly mortgage repayment is an important item in a household budget. When you are embarked on the real estate adventure and you lose your job, the financial situation can quickly become inextricable.
Impatience- You don’t buy a house overnight. Don’t be impatient and don’t buy anything that doesn’t suit you. The idea to buy is also maturing. So start dealing with the real estate market at an early stage. Make many visits to get a good picture of the houses on offer. It is important to get a picture on-site because a lot of things are shown in advertisements. Over time you get a feel for the quality of the houses and the prices.
If you are impatient and uninformed, you run the risk of paying too much for your home.
Hustle and bustle from outside- Many sellers and some brokers try to put pressure on you to speed up your decision. They often bring in other interested parties who also want to buy. Don’t be put off by such psychological games. So don’t put yourself under pressure and take enough time to make a sensible decision.
Good faith- To keep faith is good, but control is better. You should take this to heart, especially when buying a new home. Do not believe everything the seller or broker tells you. Especially, when it comes to the condition of the home that the broker is selling to you. It is often tried to hide known defects. So you always have to be critical. Visit the house several times. If possible, take other people who are more knowledgeable with you.
Keep the points described in mind. They can save you a lot of trouble that you definitely do not want. Much associate homeownership with happiness and satisfaction. So don’t make your house purchase a nightmare.
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