How to avoid common newbie real estate investor mistakes
Since the subject of this topic is investment, the area that it puts up for discussion is from the buyers point of view, rather than that of the real estate agency. The investment in a home will probably be the biggest investment that a first time buyer has ever had to cope with. The enormity of the task in hand means that a buyer that is unaware of the housing market game is ripe pickings for those people trying to offload property or loans that are unsuitable for their purposes.
The areas to investigate when buying a first time home are these:
*Where are you going to get your loan.
*What price bracket can you realistically afford.
*Special concessions for first time ownership.
*Researching the housing market.
*Being aware of true costs.
*Relying upon professional advice on the structural condition of the home.
*Finding a lawyer you can trust.
Where to get your loan.
Television advertises companies that offer mortgages, though be very careful. There are many packages out there that look tempting, and those that offer smaller repayments actually cost more in the long run because the interest you will pay on longer term mortgages will mean that it will be a pricey way to borrow money. Unfortunately, not all first time buyers can be that fussy about how much they can realistically afford to repay, and are limited for choice, although many lenders give special deals to first time homeowners, and these are worth investigating.
What price bracket can you realistically afford ?
When borrowing money, be aware that you will not only have to be able to afford the mortgage. The hidden costs of buying are those utility bills that you, as a homeowner, will be expected to pay. Research really will get rid of the shock factor. If you have seen housing that you like the look of, go beyond looks and ask to see past utility bills in order to help you assess how much you will have to find per month just to pay for the house, add to that the cost of ordinary living like fuel for your car, and all the monthly outgoings that you have to give yourself an accurate picture of cost.
Having done your calculations, know your limits, and decide upon what price range you can afford to look at, and here, you can look at houses a little more expensive allowing for the fact that most home owners expect you to barter a little to get a good deal.
Special concessions for first time ownership.
Not only do lenders have special concessions for first time buyers, many construction companies have deals on new housing designed to get first time buyers interested in their housing developments. Check these out as you may find it will make a difference. Government agencies may also have special housing projects where deals are offered to first time buyers.
Being aware of true costs
When first time buyers find that house that tempts them, often they forget the fees element to buying. Here be wise in asking real estate agents exactly what their costs will be in addition to the price paid for the house, and what the conveyancing fees will be for a lawyer to draw up the papers to help you buy the home.
Researching the housing market.
When looking for that first home, read the newspapers, see what is available and at what price. Look for like for like comparisons, and learn what the market value of homes is in your area, instead of going into the market not knowing what to expect. Get brochures and information from real estate agents, although do be careful. If you take information from real estate agents on a property, they will ask for your details and expect a fee. If you start your hunt with advertisements in the paper, you may find a better deal sold privately.
Relying upon professional advice on the structural condition of the home.
When you have found a home that you think is a distinct possibility, don’t let excitement rule your head. Make an offer a little lower than the asking price because you have nothing to lose. Also instruct someone to take out a structural survey on the home because although the lender will do surveys, they are not interested in whether you are getting value. They are more interested in whether they will get their money back if you miss payments on your mortgage. A structural engineer’s report will highlight areas where the home may cost you money, and give you a realistic look at what the home owners may not have told you. This could be a valuable weapon in the price bartering, though taking on a home that needs repairs that are beyond your financial resources is an unwise move.
Finding a lawyer you can trust.
A family lawyer is usually a great idea as your family will have confidence in their abilities and will have used them over a period of time. You can also go on recommendations from people that you trust.
The home buying minefield doesn’t have to be hard if you take each step one at a time and are thorough in your search for a loan, in researching the market, in asking professional advice and taking it. The home market is an important one, and the investment you are about to make probably one of the biggest decisions you will have to make in your younger life. Do it right, and invest for the future. Do it blindly, and you may get caught out.