10 Mistakes To Avoid When Buying a Home
2020/11/02

"MISTAKE #1 - Looking at homes before getting pre-approved by a lender "

Until meeting with a qualified loan officer, it's impossible to know exactly how much a bank is willing to loan you for a home purchase. Lenders essentially use five criteria to determine their willingness to fund your bond: • Your income • Your deposit • Your credit record • Your employment status and history • The value of the property A pre-approval letter from a lender will establish a price range to aid in your home search. It also can be used as a valuable negotiating tool once you make an offer on a home.

MISTAKE #2 - Selecting your lender based solely on a low interest rate The lowest rate is not necessarily the best 'deal' for you. Lenders sometimes offer attractive rates to lure applicants - check the terms and conditions for hidden costs.

MISTAKE #3 - Choosing the most expensive home in the neighbourhood that's been extensively improved There's always one home in the neighbourhood that's practically bursting with brand new amenities and top-of-the-line appliances. It's usually priced a lot higher than other homes in the neighbourhood. While it can be quite an advantage to own a moderately priced home surrounded by more expensive homes, it's not a good idea to own an expensive home surrounded by homes of lesser value. Start your home search the right way!

MISTAKE #4 - Purchasing a home that fits you “right now” Buying a home is a long term investment, so you should think about the long term! Don't underestimate the size of your dream home in an effort to avoid spending more cash and incurring a higher bond repayment.

MISTAKE #5 - Failing to investigate property taxes If you're considering buying a home, go beyond looking at the tax amount stated on the listing sheet or the current tax bill. Call the municipality where the home is located and ask how often properties are reassessed and how much they go up on average. If it's been a while since the last reassessment, you could incur a large increase once you buy the home.

MISTAKE #6 - Purchasing a home without a professional, experienced estate agent Having a knowledgeable, experienced buyers' specialist means that you always have someone looking out for your best interests. Buyers' agents have a wealth of specialized skills, tools and resources that are custom-tailored to fit the needs of home buyers. When you work with a buyers' specialist, they will assist you in the selection process by guiding you to homes that are best suited to your needs, budget and dreams.

MISTAKE #7 - Giving your information to the agent at the show house By doing this, you might inadvertently give up your right to have your own agent and compromise your negotiating power. Know your rights by reviewing all of the buyer resources available to you.

MISTAKE #8 - Believing that you cannot negotiate terms on new construction Like any negotiation, you have a 50% chance of getting a 'yes'. However, it never hurts to ask! Start browsing and learning more about your new construction options before you buy.

MISTAKE #9 - Failing to ensure the seller gets all repairs done prior to registration Once your home is registered, you are responsible for all repairs needed. This may add up to thousands of Rands coming out of your pocket.

MISTAKE #10 - Getting directly involved in the negotiations You are not saving money this way and you may miss important issues.

Realty King IPG

RTS