9 secrets nobody told you about buying your home
Let’s do some planning:
1. Don’t move your money
It’s a good idea not to make any huge purchases or move your money around three to six months before buying a new home. You don’t want to take any big chances with your credit profile. Make it easy for lenders because they need to see that you’re reliable, while they also want a complete paper trail so that they can get you the best loan possible. Pitfalls are opening new credit cards, amassing too much debt or buying a lot of expensive items. If you fall into any of these, you’re going to have a hard time getting a loan.
2. Make sure you’ve been Pre-Approved for Your Home Loan
Getting pre-qualified is only the first step. Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can’t afford. It’s a great opportunity to shop around for a good deal and a competitive interest rate. Do your research: make sure you understand about the extra fees and hidden costs in the loan.
3. Don’t worry about trying to time the market
What’s the best time to buy? Trying to answer this question and anticipating the housing market is impossible. The best time to buy is when you find your perfect house and you can afford it. Real estate is cyclical, the market will go up and come down. Waiting for the perfect time, means you may miss out.
4. Size doesn’t always matter
There’s an old adage in real estate that says don’t buy the biggest, most beautiful house in the street. A big house only appeals to a very small audience and you never want to limit potential buyers when you go to re-sell. Your home is only going to go up in value as much as the other houses in your street and neighbourhood. If you pay $600,000 for a home and your neighbours pay $380,000 to $400,000, your appreciation is going to be limited. Sometimes it is best to buy the worst house in the best street.
5. Get your head around the On Costs
The difference between renting and homeownership are the on costs. Most people just focus on their mortgage payment, but they also need to be aware of the other expenses such as property taxes and utilities. New homeowners also need to be prepared to pay for repairs, maintenance, and potential rate increases. Don’t stretch yourself to far.
6. You’re Buying a House – Not Dating It
There’s a big difference between your emotions and your instincts. Even if you may have fallen in love with your house, or even just the backyard. Going with your instincts once you have done your homework means that you recognise that you’re getting a great house for a good value. It’s an investment first and foremost, so stay calm and be wise.
7. Give Your House a Check up
Would you buy a car without checking under the bonnet? Of course you wouldn’t. Get a building inspection. It’ll cost about $200 but could end up saving you thousands. A building inspector’s sole responsibility is to provide you with information so that you can make a decision as to whether or not to buy. It’s really the only way to get an unbiased third-party opinion. If the inspector does find any issues with the home, you can use it as a bargaining tool for lowering the price of the home. It’s better to spend the money up front on an inspection than to find out later you have to spend a fortune.
8. What to consider before your opening offer
Your opening offer should be based on two things: what you can afford (because you don’t want to outbid yourself), and what you really believe the property is worth.
Make your opening offer something that’s fair and reasonable and isn’t going to offend the seller. A lot of people think they should go lower the first time they make an offer. It all depends on what the market is doing at the time. You need to look at what other homes have gone for in that neighbourhood and you want to get a like for like, or even an average price per square metre. Sizing up a house on a price-per-square-metre basis is a great equaliser. Also, see if the neighbours have plans to put up a new addition such as a tennis court, as it may be something that might detract from the property’s value down the road.
Sellers respect an offer that is an oddball number and are more likely to take it more seriously. When you get more specific the sellers will think you’ve given the offer careful thought.
9. Get the vibe of your Neighbourhood
Get a feel for the community and neighbourhood, drop by randomly. Many homebuyers have become completely distraught because they thought they found the perfect home, only to find out the neighbourhood wasn’t for them. Go and have a coffee at the local coffee shop, drive by the house morning, noon and night. Try the public transport, ask yourself, can I do this commute? Find out how far it is to the nearest supermarket and other services. Even if you don’t have kids, research the schools because it affects the value of your home in a very big way. If you buy a house in a good school zone versus a bad school zone even in the same town, the value can be affected by as much as 20 percent.