Whether it’s your first time buying a home or you’ve been down this road before—the entire process can be overwhelming. The property market tends to be slippery to navigate, even for the most experienced individuals. Apart from knowing the size, features, and location of the house, there are loads of papers you need to sign and lots of people to talk to. According to Elliot Adler, a San Diego real estate developer, homebuyers need to think beyond preparing thoroughly before entering the market. He shares five important things you need to know when buying a home.
1. Some Thorough Research Can Be Life-Saving
Buying a home is a large investment—probably one of the biggest you’ll ever make. For this reason, it pays to be knowledgeable about the entire purchase. Do your homework. You can start by researching the homes available in the area you want to buy and checking the average cost to help you create a realistic budget. You also want to know how the purchase process goes to avoid getting scammed. Elliot recommends talking to local agents to learn about the processes involved. Research helps you get the house you want without overpaying in the purchase price, mortgage rates, and closing costs.
2. Have a Realistic Budget (Don’t Forget Additional Costs)
House buying comes with many silent costs that most people fail to include, notes Mr. Adler. He adds that buyers are often fixated on the selling price and forget about additional costs that come with owning a home. The purchase price is just a section of the cost. You must consider other attached costs like insurance, stamp duty, council rates, and taxes. These costs can quickly add up depending on where you live. So too can the expenses related to repair of various items on the property.
3. Consider Your Future Plans
Elliot Adler warns against buying a house for the life you live. Before you agree to buy what you think might be your dream home, consider long-term plans. Do you intend to get married? Do you have children joining high school and college? How good is the school district? Are you planning to stay at your current job? These questions can help you think critically and plan carefully to ensure you get the right home size in the right location based on the needed facilities.
4. Understand the Value of a Real Estate Agent
Most buyers believe that realtors are behind a home’s overall cost. That’s why many end up not working with them. However, realtors are paid by sellers, through commission. According to Elliot, if you’re buying a property that is listed by an agent, it’s best to hire your own agent who can protect your interests. Unless you’re experienced and know the ins and outs of the market, you need an agent to negotiate prices for you, organize thorough home inspections, and guide you through the paperwork.
Another consideration is that if you choose not to bring your own agent to the deal, it could have an indirect effect on the price of the home, saving you money. The seller’s agent may choose to reduce their commission if they do not need to share it with a buyer’s agent. A seller may in turn agree to a lower price, because the net amount after payment of a (reduced) commission would be the same or better for the seller. From the buyer’s perspective, this approach works better if you already found on your own the exact home you want to buy.
5. Repairs and Renovations Can Be Expensive
When buying a house, it’s essential to look beyond paint. While some homes will have minor inexpensive cosmetic issues, some problems may require renovations which can be quite expensive. If you’re buying a home you intend to renovate various sections like the kitchen and bathroom; you should factor in such costs in your budget.