When buying a property for sale, you don’t want to invest a lot of money only to realize later that you missed several vital steps in the whole process.
For that reason, we put together the most common mistakes homebuyers do when purchasing a property for sale. Be on the safe side.
1. Carrying out a blind search
Once you decide to shop for a property, come up with a solid framework to guide you through the entire process.
In your search, create a list of must-have features as well as the add-ons. Next, select up to three suburbs and go around examining as many properties as you can, while noting the ones that match your tastes. In short, you must invest time in research, no shortcuts.
2. Purchasing on the first visit
Home sellers have a habit of showing you what you want to see on the first visit, especially if they are expecting a potential buyer. In most cases, you will find nothing less than a well-staged home. In fact, a fleeting-look at the curb appeal will sweep you off your feet.
Not so fast though, don’t readily accept the offer, the agent and home seller will push you to your limits. The best thing to do is to ignore them and walk home. A few days later, you may come for another check, this time go for details. Also, talk to a few people around about the hood, they might mention something important.
3. Thinking the sales agents are on your side
This is where most buyers go wrong. The moment they meet an agent; they believe a good deal is around the corner. Candidly, the selling agents are NOT there for you, they work for the seller and their motive is to get the property sold out.
Selling agents will sound convincing, tell you “everything” about the property and use their negotiating tactics to blind you. If you intend to know the important details of a property, ask the right questions and carry out your own research.
4. Committing beyond your means
Many times, buyers tend to push themselves beyond their financial limits. They want the property so bad that they ready to offer everything- upto the last cent. Thousands have been victims; don’t be the next in line.
Use this simple rule when purchasing a property without risking all you have.
The 25% rule
Regardless of what the bank says, ensure your repayments don’t go beyond 25% of your net income. Rules should be short and precise and that’s just it. Give yourself a chance too. The sale is not the end of world!
The 80% rule
Make sure the amount you borrow doesn’t exceed 80% of the property’s total value. This will help you shun paying mortgage insurance. And also ensure some equity in your property in the event of a down turn in the market.
5. Avoiding inspections
Inspect, inspect, inspect! Don’t get tired. That is why you shouldn’t strike a deal on the first day. You may not notice a few complications at a glance. Carry out a thorough inspection to help you discover hidden flaws.
If you’re not sure of what and how to inspect, seek help from professional house inspectors. You must be completely cognizant of the state of the house before purchase.
6. Buying a property you haven’t seen
If you are trying to cook trouble, then buying a property that you’ve never seen is the perfect recipe. Seriously, you don’t want to do this! Agents know how to advertise homes in the online platform. They aim to show the top features of the home. They always pick the best, HD pics for you to see and indeed make the property look sensational at a glimpse.
It’s not wrong to visit the web while in search for a property to purchase. But it is thoughtless to sign papers over a property that you haven’t set eyes on. Come on, how many buyers have complained of being disappointed when they set foot on a home they had seen online and fallen in love with.
7. Being influenced by rental guarantees
Home sellers will promise you huge profits if you buy their property and rent it out. But is this really the case? In most instances, it’s a big NO! It’s just a way of attracting the buyer. Typically, an excellent property doesn’t have to promise large rental guarantees to win buyers.
Additionally, you should beware; the exaggerated rental figure will push the return on investment (ROI) over the yield thereby allowing the home seller to raise the asking price of the property while still maintaining a low yield, maybe 5%.
Technically, a rental guarantee is more or less a form of insurance and all insurances will require you to pay a premium.