Weâ€™ve all heard the horror stories â€“ people paying way too much for a house, not getting an inspection and then finding a million (expensive) problems with the place.
Here are top five tips for making a smart real estate purchase so you donâ€™t get burned!
- Stick to Your Budget
Itâ€™s easy to get carried away here, especially if you make the mistake of looking at houses outside your price range. The important part is to have a plan. Donâ€™t just think about your mortgage payments every month; also think about your monthly carrying cost and be honest about your lifestyle. Consider how much you spend every month on eating out, clothing, etc. Thereâ€™s nothing worse than being house poor because you werenâ€™t honest about your spending habits.
- Donâ€™t be Afraid to Walk Away
A house is an emotional purchase, since itâ€™s where youâ€™ll be living, raising your children and making a home for yourself. But itâ€™s crucial to keep emotions out of the equation as much as possible. You should love your house, but you should love it because itâ€™s in good condition and because the numbers work. Always get a home inspection and if you canâ€™t afford it (or the work it requires), walk away!
- Give Every House a Chance
As do most people now, most real estate properties are browsed online, but you canâ€™t always judge a house by the virtual tour â€“ good or bad. If you see something online and it has bad pictures (or no pictures) but itâ€™s in the right neighbourhood or in your price range, go look at it! Chances are you can get a good deal because so many people will skip it without photos online.
- Think Long-Term
Before you jump into a real estate purchase, ask yourself: â€œWhat is the purpose of this property for the next 5-10 years?â€ Depending on your mortgage, you may have to lock in for a certain number of years, and if you think youâ€™ll be moving in less than 5 years, Iâ€™d suggest looking at alternatives. You never want to be forced into selling your house.
- Have a Support System
Having a real estate agent who understands your financial and personal situation is key, and great advice from a mortgage specialist and lawyer can be invaluable to the home-buying process. But what many people forget is to have a personal support system in place when they go house hunting. Advice from those close to you â€“ family members, a partner, friends â€“ is just as important to help keep you on track and avoid getting carried away. Itâ€™s easy to get caught up in the excitement of buying a house, so having the personal support will keep you grounded.