Buying or investing in a new property is one of the most exciting experiences for an individual. In most cases, buying a new property signals some kind of achievement. Individuals and families looking to buy a new property for multiple reasons-
- Exploring real estate as a credible real estate option
- Generating side income through rental solutions
- An increase in the family size necessitates the need for a bigger house
- Shifting to a new location, city, region, or even country
- Creating an asset that can be fallen back upon during retirement
Having the finances ready is not going to ensure that you get the best experience on your property buying experience. There are several other factors that need to be considered in this regard.
Buying a new property requires eliminating mistakes that can sour your house-buying experience. In this article, we speak to a leading Real Estate African-American realtor. We request him to list down ten probable mistakes that homebuyers should look to avoid when buying a new property.
- 1 List of the Top 10 Mistakes to Avoid when Buying a New Property
- 1.1 Mistake 1: Thinking Online Platforms are Enough and Real Estate Agents are wasteful
- 1.2 Mistake 2: Going for a Neighbourhood that will not suit your interests
- 1.3 Mistake 3: Failure to get the New Property Appraised by an Expert
- 1.4 Mistake 4: Having a Poor Understanding of Renovation Costs and Overheads
- 1.5 Mistake 5: Making a Decision on the First Property you come across
- 1.6 Mistake 6: Not Doing Due Diligence or Research on the New Property
- 1.7 Mistake 7: Being Over Enthusiastic on the Home Loan and Financial Front
- 1.8 Mistake 8: Committing to an Initial Offer without doing your Research
- 1.9 Mistake 8: Underestimating your Future Requirements as a Family
- 1.10 Mistake 9: Being Unnecessarily Pessimistic and Delaying the Decision
- 1.11 Mistake 10: Trying to Micro-Manage every aspect of the Property Buying Experience
- 2 The Bottom Line
List of the Top 10 Mistakes to Avoid when Buying a New Property
Mistake 1: Thinking Online Platforms are Enough and Real Estate Agents are wasteful
If you have been reading the news, you might be aware of how ‘Zillow’ has crashed! It has laid off more than 2000 employees and created one of the worst inflation crises in the real estate sector in the United States. A lot of us have become dependent on such house hunting platforms.
If experts are to be believed, working with a credible real estate agent is still the best option when it comes to buying a new property. Online platforms and apps have their own limitations.
Mistake 2: Going for a Neighbourhood that will not suit your interests
No matter how much we deny the presence of ethnic and racial strives, the reality is that they exist. The situation becomes complex for ethnic groups like Latins, South Asians, or even African Americans. Given the current social reality and situation, we need to look at buying property in areas that we feel safe in.
This is again an issue where a solid and experienced real estate agent can help you out. They are aware of the underlying situations and can help you.
Mistake 3: Failure to get the New Property Appraised by an Expert
An existing property buyer can quote any figure which they feel is right. However, property prices are an area that can be approached in an objective fashion. In other words, you can break it up into numbers, statistics, and data.
One sure way of getting the best deals and prices on your new property is understanding how much it is really worth! This can be done by getting in touch with appraisers that can assess the value of a property and help you make a decision.
Mistake 4: Having a Poor Understanding of Renovation Costs and Overheads
Buying a new property and paying the existing owner is not the only major cost you are looking at. New homeowners often exhaust all their funds in simply purchasing an existing property.
What they fail to factor in are all the costs that would be required for renovation, redecoration, and design work. Even if you skip the costs of the interior designer, you cannot afford to move into a home with a leaky ceiling, broken flooring, and a pest-infested basement.
Mistake 5: Making a Decision on the First Property you come across
Many of us have heard our elders say that the more options you look at, the higher will be the levels of confusion. While this may be true, it should not deter you from exploring as many options and listings as possible.
This is probably going to be one of the major investment decisions of your life. You need to be as thorough with it as possible. Make sure that you check out as many homes as possible with an objective eye and evaluate all the pros and cons of each.
Mistake 6: Not Doing Due Diligence or Research on the New Property
You might think that you have found the perfect place at the best price point. However, it is important to remember that if something appears too good to be true, it is probably false! You need to look at the paperwork for the home and get the financial details.
Look for the times the house has been mortgaged or if there are any other financial liabilities regarding the same. You can get into a lot of trouble and litigation if the house is contested by multiple owners.
Mistake 7: Being Over Enthusiastic on the Home Loan and Financial Front
Financial institutions have their own assessment of properties and creditworthiness. It differs from case to case. While your credit score might be great, there are ten other considerations that lenders look at when extending credit.
Do not commit to a price before you first seek a proper consultation and seal of approval from the financial institution you are looking to raise the home loan from. Once they are confident, you can proceed with the down payment.
Mistake 8: Committing to an Initial Offer without doing your Research
The property market is hot right now and sellers use every trick in the book to make potential buyers commit. You will hear sellers say how so many different families are showing interest, or how they have already received offers.
They do this to egg you on into making a rushed offer. Leading real estate agents point out that rushed offers are often emotional decisions, which new buyers end up regretting later on. You need to do your research in advance.
Mistake 8: Underestimating your Future Requirements as a Family
Many of us are now working remotely or carrying out WFH engagements. This has necessitated the demands for bigger homes, where a home office can be set up. We pointed out this example, to help you understand that buying a new property means evaluating your needs over the next decade or so.
People do not change homes every year unless they are celebs. If you plan to make an investment in a property, you need to see whether it fits your future needs or not.
Mistake 9: Being Unnecessarily Pessimistic and Delaying the Decision
Just like rushing in to make a decision can be bad, so too can be engaging in delays. Thinking ‘if it is meant to happen, it will happen’ will see someone swoop in at the last instance and take the property. You need to take a calculated decision based on as much information as possible.
If you are dragging your feet for too long, you might miss out on the property. This can cost you valuable time, effort, and investment. It can also cost you your mental peace.
Mistake 10: Trying to Micro-Manage every aspect of the Property Buying Experience
While some homeowners tend to be emotional when it comes to buying a new property, others are guilty of being too rational and objective. You are buying a house to make it into a home. At the end of the day, you can evaluate all the factors, but you need to have that emotional connection.
In other words, can you see your family, wife, kids, and dog staying in the new property and thriving or not? It is important to balance between being subjective and objective.
The Bottom Line
As a homeowner, if you are able to eliminate the mistakes that have been mentioned in the article, you will improve your chances of landing a great new property. If you have any questions, you would like us to answer, please let us know in the comments below. We would be more than happy to help you on your home buying journey.