There are few purchases in life that carry the financial and psychological weight of buying a home.
Whether you are buying your first home or downsizing your home and your life after the kids have gone, it pays to understand the ground rules for success in the home buying world.
Making the wrong decision when buying a home can have devastating and long lasting effects, while making a wise decision in home buying can greatly enhance the overall value of the investment.
It is advisable to learn all you can about property and mortgages before setting out to purchase the home of your choice.
Whilst there are plenty of web sites designed to help first time homeowners learn all they can, most financial experts say that there is no substitute for experience, or talking to someone with experience.
When buying a home it is wise to use a systematic approach, as this is often the best way to be sure that all decisions are based on information and reason. Buying a home can be an emotional process. Nevertheless it is imperative to keep emotions under control and not let them cloud your judgment.
There are five basic ground rules when it comes to buying a home wisely, they are:
1 Get your financing before you get your home
There are few things in life as disappointing as losing out on the home of your dreams because you are unable to secure funding.
While the desire to get out there and search for that great home is understandable, it is vital to line up the financing you will need before you start shopping for a home.
Getting the financing ahead of time has a number of important advantages, including knowing how much you can pay and gaining more respect from the property agents.
By knowing how much home you can afford, you will avoid wasting your time looking at unaffordable properties, and the agent will be more than willing to show you the homes in your price range.
It is also important to take a good look at the various types of mortgage on the market before getting started in the home buying process.
These days, mortgages come in far more choices than the typical 15 or 20 year. For that reason, potential home buyers need to understand how each type of mortgage works, and to gauge which mortgage is the best choice for their needs.
2 Look at the area, not just the property
It is a good idea to look at the entire area and community, instead of focusing on a single property.
This can be a particularly important thing to consider if you have recently moved to Macau, and may be unfamiliar with the local climate and lifestyle.
It is crucial to determine the areas of town that are most desirable, and to consider things like distance from work and access to transportation.
We have all heard that location is the key consideration when it comes to real estate, and that is certainly the case.
Buying a house in the wrong area can be a big mistake, and it is important to choose the location as well as the home.
3 Be fair with your first offer
Trying to lowball a seller on the first offer can backfire, as can paying too much.
It is important to carefully evaluate the market, and to compare the asking price of the home with what similar houses in the neighborhood have sold for.
Comparing the sales of comparable homes, what are known as “comps” in the industry, is one of the best ways to determine what is fair, and to make sure that you neither overpay or underbid on the property.
4 Conduct a home inspection
Investigate the home for possible defects before making an offer. Compared to the cost of the average home, the price of a home inspection by a reliable contractor is virtually negligible.
To find a good contractor, it is a good idea to seek out referrals as many of the best contractors rely purely on word of mouth advertising.
5 Do not alienate the sellers of the home
Many real estate deals have fallen apart due to the personal animosity of the buyer and the seller.
It is important to avoid alienating the seller of the home during the process, and to avoid nitpicking every little detail during the sale.
Keeping the good will of the seller will help the transaction go smoothly, and it will provide the best environment for seller and buyer alike.