Buying a home is something most people do only a few times, if at all, during their lives. So it’s understandable that very few non-professionals become practiced enough to remember even the fundamentals. So here’s a checklist of five things to bear in mind when you’re choosing and purchasing real estate.
1. Not Finding the Right Area
When real estate professionals say the the three most important things about any property are “location, location, and location,” they’re not kidding. And they’re not just talking about waterfront sites, spectacular views, or swanky addresses. Everyone has their own personal set of criteria for their ideal location, which varies with their lives.
Young couples may prioritize finding a home in a great school district over everything else — even an easy commute. Retirees may need to be close to excellent medical facilities (and the grandkids). Most want shopping facilities and entertainment venues reasonably close at hand.
Then there’s the neighborhood itself to consider: Is the crime rate low, and are you going to fit in with your neighbors in terms of age and income? That sort of information is generally easy to find online, but it’s worth visiting your prospective home at different times of day to get a feel for possible problems (noise levels, in particular) that might not have been evident when you first visited. And it’s definitely worth having a chat about the area with one or two neighbors while you’re there.
Choosing the wrong location can be devastating in years to come, and it’s something that can affect lots of choices you will have to make in the future. Getting it right from the beginning can save a lot of heartache.
2. Not Buying at the Right Time
Some local home markets are notoriously volatile. That’s probably not going to be a problem if you plan to stay put for a long time, but you need to be cautious if you might have to move again in a few years. Check out local property prices and research how much similar homes were going for a few years ago. Of course, you might win big if you buy in an area where prices move up and down quickly. But you might lose big too.
As well as a right market time to buy, there’s a right personal time too. Save for as big a down payment as you can afford, and get your credit score in shape, and you stand to get a better mortgage rate than others in less strong positions.
Don’t stress out too much about the market. Only a lucky few get to buy when home prices and mortgage rates are both low, although now’s a great time in some areas. Absent the threat of plummeting prices, it’s more important that you make your move when you’re ready rather than when all conditions are “perfect.”
3. Not Getting a Home Inspection
Unless you’re a professional in the construction industry, it’s a very good idea to have a home inspection carried out — even if your lender doesn’t insist on one. And yet Bill Loden of the American Society of Home Inspectors reckons as many as 10 percent of homes bought recently have not been inspected. The buyers were cutting costs by not having to pay the inspection fees, but this can be a very expensive mistake to make when buying a home.
“It takes a trained eye to be able to see the problems that can exist in a home,” Loden said. Questionable smells, cracks, and water stains can all be signs of serious problems with a building, and can be indicative of leaks, dry rot, termites, subsidence, and bad foundations. When it comes to home inspections, it really is better to be safe than sorry.
4. Not Working with a Real Estate Broker
Real estate brokers, including Realtors, don’t generally charge upfront fees. Instead they make their money through commissions on the properties they sell. And using one to help with your purchase can save you a heap of money in the long run.
As well at saving you time and money by narrowing down your search parameters and negotiating a good price, remember that real estate professionals are usually trained in all the legalities of buying a home, and should be able to safely guide you through complicated deed and contract procedures. If you don’t have one, you will not know what problems you may run into in the future.
5. Not Shopping Around for a Mortgage
Shopping for the best mortgage deals is where big money can be saved right from the start. And yet federal regulator the Consumer Financial Protection Bureau says that almost half of borrowers don’t bother to comparison shop when finding a mortgage. Everyone shops around when buying a new stereo or laptop, so why not do the same when it comes to the much bigger purchase of a home?
Checking out the best interest rates and terms from multiple lenders could see you find the mortgage that’s ideal for both you and your wallet. And shaving just a little off a rate can save you thousands of dollars over the lifetime of a loan.
LendingTree is the nation's leading online loan marketplace providing consumers an easy way to shop and compare funding for life's matters. With LendingTree's marketplace, you can connect with multiple lenders that compete for your business. You can also find an array of credit based tools and tips on LendingTree, including free monthly credit scores to help you stay empowered financially.
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