Investing in the real estate market is fun and, at the same time, a challenge, especially if you are new to it. There is an abundance of opportunities that you can explore and capitalize on without breaking a sweat. This post focuses on the best real estate tips that would help new and experienced buyers make the best real estate choices.
1. A home is a long-term investment so buy it for today and tomorrow
When you are checking out homes, keep your emotions at bay and explore them with a clear and open mind. A smart buyer would keep the future in mind before making a buying decision. When we say future, it means is there a likelihood for expansion – this could be in the form of children, parents, pets, etc.
Real estate experts confirm that, on an average, it takes a minimum of four years to recover the cost of buying a house. Meaning, if you end up having to sell your home before that, say on a couple of years after the purchase, it will cost you a considerable loss. When you keep the future in mind while home shopping, it will increase your chances of feeling content in your new abode.
2. Take note that repairs and renovations are expensive
Every lived-in home will need some repair and renovation, but take note of what you are willing to deal with since you will have to bear additional costs. If there is a significant amount of damage, it will cost you more. If you are considering renovation, be mindful of the costs associated with it. Building and repair costs also vary from region to region; for instance, it will be way higher in cities than it would be in the suburbs. Therefore buyers need to include these costs in their home buying budget to avoid a financial crunch post-purchase.
3. Building/Home Inspection is crucial
No matter how grand or beautiful the house looks, it is imperative to get a home inspection done before signing the contract. Problems with the plumbing, wiring, and other structural issues may not be as apparent to us as they would be to a professional. If any building issues were missed, the home inspector can point it out to you and estimate the repair costs. Also, the information collected during a home inspection can create a room for you to negotiate and talk down the price. Another option is to include clauses in the contract requesting the seller to make the necessary repairs before the money is exchanged. If the seller declines the option, then you can estimate the cost and ask them to take that cost off the total amount.
4. You should Love thy neighborhood
It is common sense to look into your neighborhood’s condition before you decide to buy a home in a particular locality. Feeling unsure and not knowing the community well enough can cause you problems in the future. To know the locality properly, you need to visit it during different times of the day and maybe even different days in the week. Familiarising with the surroundings will help you understand the place’s vibe and whether it is compatible with you. For instance, if the property is near a hospital or a school, you would have to deal with many traffic and noise on the roads. So acquainting yourself with the neighborhood will help you avoid future pitfalls.
5. Know your Financial Options
A property is a massive investment, so you need to keep your finances well in place before checking out houses. There are several agencies and lenders, so you need to compare different financiers to get the lender with the lowest interest rates.
Compare different types of lenders such as big banks, credit unions, and online lenders; this will help you better understand mortgage insurance premiums, lender fees, third-party fees, and others. Finding the right financier is as essential as finding the right home .
Mortgage payment includes homeowner’s insurance plus taxes, among other smaller fees, so don’t forget to add these items on top of your monthly mortgage quote to know the total amount that you will be required to pay.
6. Don’t overlook Stamp Duty and Registration Fees
Whenever there is a transaction of property, the government levies a tax on it known as Stamp Duty. This fee is payable by the buyer when there is a purchase of a property. You will be required to pay this fee within three months of the exchange of contracts. The Stamp duty depends on the property’s cost; the higher the property’s value, the higher will be the Stamp duty. Therefore you need to include it in your home buying budget. The state levies this fee, and so the amount will vary from State to State.
Registration is the final agreement of ownership of the property where the seller and the buyer agree on the ownership change. And for this agreement, the court charges the registration fees, usually somewhere between 1-2%. Though it seems like a small percentage, it sums up to a significant amount.
7. Get Legal Review before Signing A Contract
Many home buyers brush this off as an extra expense, but to stay on the safer side, you need to get your sale and purchase agreement reviewed by a lawyer before you sign on it. When all the formalities are settled, the lawyer will handle the conveyancing. When you hire the services of an attorney, it gives you room for negotiating on things such as –
- Settlement period
- Deposit amount
8. Be Aware Of the Closing costs
When you finalize a property’s purchase, you will incur some charges, which are referred to as closing costs. Closing costs apply to both buyers as well as sellers. For buyers, the closing costs are typically divided into two categories –
- Costs related to buying a home and taking out a home loan – in this category, lenders and third-parties charge you with different fees associated with processing your paperwork which eventually approves the loan.
- Costs associated with owning a home – this category of closing costs includes homeowners insurance, property tax, and other dues.
You can roll the closing fee into the final mortgage amount and pay it through monthly installments.
9. Hire a Buyer’s Agent
Buyer’s agent saves you a lot of time and keeps you away from the pitfalls of buying a property. A good buyer’s agent will have close connections with local real estate agents informing them of all the potential properties in an area. A buyer’s agent will help you with the negotiations and secure a lower down payment for you.
When you decide on buying a home without an agent, you are making yourself vulnerable to unexpected and unwanted costs. An agent can help you get all the repairs done through the seller or even reduce the closing costs. Hiring a buyer’s agent is worth it.
It’s not the end yet
Your home buying journey does not end with signing the final contract and moving into your new abode. Homes are the most significant investments that we deal with in our lives, and many times we rely on them to help with our retirement fund. So it would be best if you kept an eye on the changing trends in real estate markets to make the best investments.