Buying a home is exciting. Are you sick of living in a rental home? Have you decided the time is ripe to take a step on the property ladder? If so, you probably have your down payment all saved up and the mortgage company is willing to loan you the rest, so the rest is easy, right?
Wrong! Buying a home is fraught with difficulties, even if you have done this a few times already. There is so much that can go wrong, and most of it will cost you big time. Plenty of first-time buyers and experienced buyers alike make disastrous decisions that leave them out of pocket. Unfortunately, a new home is not quite as easy to return as a badly fitting pair of shoes. Once you own property, it can take months to sell it on, and the bill won’t be cheap.
The best way to skip a lifetime’s worth of nightmares is to make as few mistakes as possible on your home purchase journey. The following three potholes are best avoided at all costs.
Don’t Buy a Fixer-Upper
Fixer-uppers are often very attractive to first-time buyers because they allow you to live in a neighborhood that would otherwise be beyond your means. However, a fixer-upper is one heck of a risky purchase. Unless you are an expert in home renovations or you have deep pockets, this type of property is not for you. No matter how cute it looks from the outside, the likelihood is that you will be pouring your hard-earned cash into a bottomless money pit.
Always Have a Pre-Purchase Home Inspection
Home inspections are there to protect you, the buyer, from making a bad buying decision. A professional home inspection will spot structural problems, damp, dodgy wiring, a problem roof, and any other potentially expensive issues. A home inspector will advise you if further surveys are recommended, such as a termite inspection or an appliance check. Take their advice and if they recommend that you think twice before buying the property, listen to them.
A poor home inspection report is not always bad news. If you are still determined to buy the property, as long as the mortgage company is happy to lend you the money (some won’t if there are major issues with a property), use the survey to negotiate a better price. The homeowner may be willing to reduce the asking price to compensate for any major work that needs doing. If not, walk away. There are other houses out there.
Don’t Buy at Your Limit
Never spend more than you can realistically afford. The mortgage company will base their lending decision on your income and expenditure, but there is always a temptation to spend right up to the limit of your borrowing capacity. The problem with doing this is that it leaves you very little wiggle room. Say, for example, your partner loses his job or you decide to take an extended maternity leave. Buy something cheaper and it will give you more disposable income to save up for a rainy day.
Buying a house is the most expensive purchase you will ever make, so take it slowly and listen to expert advice at every stage of the process.