Common Mistake Home Buyers Make

We live in a time where almost every device you touch gives you an opportunity to spend money. That’s part of the reason why some people can’t afford homes. Do the math.

Homes don’t come cheap, that means that it might take you lots of years to gather or save enough money to buy one. Nowadays, Banks and other financial institutions offer mortgages and loans like candy to people who have a good credit rating, but did you ever think about how you go from good credit to bad?

It’s very simple really, you sign a contract, get yourself into a situation you can’t afford and your credit goes to shit.  When buying a home there are lots of mistakes you can make, some are easy to correct and some might change your life forever. Remember back in 2008 when banks gave out loans to people who couldn’t afford them, what happened? The houses bought were foreclosed meaning all the money those people put in was lost. Picture yourself losing your home after paying a mortgage for let’s say 10 years. Doesn’t sound pretty, right?

You don’t think long-term

Not thinking long term might result in costly mistakes such as:

  • Putting down a tiny down payment
  • Buying when you are not financially ready
  • High-interest rates
  • Choosing the wrong type of loan
  • Not getting the home inspected

Remember that a home can stay in the family for generations, so you have to think about how close it is from schools, hospitals, and other amenities or desirable features that you might need. There is also the issue of safety, are there sex offenders in the area? Is the crime rate high or expected to rise in the area? Can you monthly mortgage payments and interest rates?

You don’t get everything in writing

Let’s assume that a problem is found during a home inspection and the seller promises to fix the problem via word of mouth. If you go ahead and sign the contract there is nothing keeping the seller from refusing to make the repairs, why? There is no evidence that he or she agreed to make the repairs. Any agreement made between you and anyone during the home buying process should be done in writing. Remember, a document becomes a contract only when both parties sign.

You buy at the wrong time and you lack negotiation skills

Before negotiations start, you should know exactly what you are purchasing. For example, if the house has problems that you can’t afford, you can ask the seller to fix them or lower the price.

As a buyer, there are a number of things you can do to strengthen your negotiation power, they include:

  • Do your homework: find out how much similar properties go for in the area and look at current market conditions.
  • Keep your options open: don’t show too much interest in one property.
  • Use market value instead of asking price
  • Learn to say no.
  • Negotiate in person or on phone before signing anything

About the Author nanaimo_home