Common Mistakes Made When Buying a House

By Amina Faki

A number of times we find ourselves in a dilemma choosing what’s best when it comes to buying a house.

This many a times has led to individuals making mistakes. It’s prudent to acquire as much information as possible as you shop around for a house. While it is likely to be the largest financial transaction you will ever make, many home buyers are poorly prepared to ensure they make a good purchase decision.

This is not entirely their fault; the system is stacked against them, with much of the power being on the side of the buyer.

It’s advisable to make a wise purchase and avoid typical disappointments months or years down the line.

Not doing proper research and preparation; the wise home and real estate buyer will analyze assets, decipher debts and get pre-approved for finance before plunging into the house hunt. Getting to know the neighborhood is crucial, remember you are not just buying a house; you are also buying a location. It’s important to find out about the quality of schools, the crime level, transport and possibly upcoming zoning issues. Not all parts are the ideal spot to live.

Choosing the wrong mortgage; to put you in the best negotiating position, it’s crucial to have your loan preapproved (not just Pre-qualified) before going house hunting. Find out how much house you can afford. It’s important to pick your finance package carefully. Don’t just go to one bank, instead use an independent finance broker who has access to a range of lenders and finance products.

Being influenced by ‘the Market’; don’t be influenced by the market more than your own needs. Sure the property market moves in cycles and there are times when they suit buyers and there are sellers’ markets when prices are booming. However, waiting for the right time or prices to go down is gambling with your family’s future. At times the mixed messages in the media may confuse you and you’ll be tempted to put off the decision to buy. If you know your budget well enough, have your finance organized and think about your current and future needs, then you should rarely let short-term market conditions influence what will be a long-term lifestyle decision.

Going solo; home sellers have an agent that protects their interests and advising them but most buyers go solo. You probably have a good head on your shoulders and may even have a good working knowledge of the home buying process. What you probably don’t have, however, is perspective. It’s critical to engage a professional buyer’s agent in representing your interests.

Misunderstanding the real estate agent’s role; real estate agents are friendly people and in the course of shopping for a house, you will spend a lot of time with various agents. However, the wise home buyer understands who’s working for whom. Unless you have engaged an exclusive buyers’ agent, then the agents are working for the sellers. Don’t be mistaken – a selling agent can’t work in the interests of both the buyer and the seller. In fact, they’re legally and morally obliged to work for their client the seller.

Not organizing a professional building inspection; it’s important to engage a competent and independent (not one recommended by the selling agent) professional to check your potential new home.

The ‘fed up’ purchase; one big mistake home buyers make is to buy a property in desperation. They buy something reasonable rather than something that really suits their needs because they’re sick of the emotional rollercoaster of home buying. Rather than buying out of frustration, stop looking for a while, or better still get a buyer’s agent on your side to save you time, to look in nooks and crannies you wouldn’t have thought of and to find those silent sales for you – the off-market properties.

Understanding the full cost of buying a house; Many homebuyers fail to budget for the full costs associated with buying a house, then don’t underestimate the ongoing costs of owning your property. Owning can cost much more than renting with expenses like rates, insurance, and maintenance

Going beyond the budget; every homebuyer knows the feeling, you’re looking for a home that fits your budget, but that much more expensive property just looks that much more appealing.  Spending more than you can sensibly afford leaves you exposed to potential financial shocks, including rises in interest rates.

Falling in love; if you think the house is ideal; don’t let the seller’s agent know. Agents are good at reading the buyers emotions and negotiating the last cent of a prospective buyer. If you can’t afford it, move on and keep looking.

These are just but only a few of the common mistakes we make, there are many other issues to consider when buying a house.