Top 5 Blunders By New Home BuyersEconomy | December 1, 2009 at 1:05 am
Since 20 years, you have been switching from one city to other and finding places on rent with facilities of your choices. Today, you have earned a modest amount and want to buy a satisfying new home for yourself. You have been waiting for this day since many years. Finally the time has arrived to buy your first house and you are checking local newspapers, and visiting places to buy a new house.
Excited? Very Good. You must be. But this excitement causes most hazardous mistakes that are generally overlooked by new home buyers. Below are few blunders generally made by buyers transforming from renters to owners.
Deciding based on worthless perquisites
If you are a buying a new house for the first time, the top three homes that you liked got to have a swimming pool. Isn’t it? And why not? It just looks perfect. What you don’t bother thinking is that a pool is very not as cheap to maintain as you are considering it to be. Moreover, you will get very few customers that are interested in buying a house with pool, when you try to resell your house.
It’s not just the pool I am talking about. You can entrap yourself with any of the perks attached with the house. You could love a house just because it’s located besides the interstate and it has some cool bar which you can stare from the window. These benefits don’t worth much, but you end up paying double of what you would have paid without them.
Remember; don’t get lured by worthless benefits while buying a home. You can always add those later on.
Not calculating repairing expenses
When you are living in a rented house, repairs are quickly done by your landlord. However, the problem arises when you are the landlord. You are responsible for the payment of repairs that needs to be done in your house. Fixing the leaking pipe is now your headache. The exhaust of your air condition is faulty; spend from your own pocket. Get a grass cutter, find a snow digger, change broken equipments and what not. Individually, each doesn’t cost you much. When these are added up, it’s huge and it’s recurring.
This is a common mistake made by first time buyers. They buy a large house, the monthly mortgage payment of which is more than their income. How do you think they could manage these expenses? They sell their houses, learn from their mistakes and buy a smaller and better house.
So, what do you learn from their mistakes? Try to get a house that costs somewhat less than what you can pay for. Keep aside some money for unanticipated expenses and for future renovations.
Reliability on Tax deductions
Some areas enjoy more benefit than others when it comes to income tax. The vicinity of Monaco levies no income tax for its residents whereas people in England have to pay enormous amount of funds as income tax. Many countries also offer tax deductions on the interest charged on mortgage amount. Hence, people tend to relocate to such places because they think they are saving money.
However, they aren’t really saving big money. If your income for the year is less than hundred thousand dollars and you have two kids living with you, I don’t really think you have to pay much of money as income tax. And if you don’t have to pay much of tax, then why relocate to some other place just to save what you are not going to pay.
So get rid of this income tax delusion and select a home depending on comfort rather than tax-free-area.
Lack of knowledge about the Neighborhood
Very few people try to acquire some information about the locality and neighboring people, even after buying the house. And fewer people decide on home locality after considering this information.
Remember, you are buying a house, not staying as a renter. A renter can pack his luggage and move to another city quickly, if he or she doesn’t like the locality. But you cannot. You are spending more than half of your monthly income to repay the mortgage amount and probably will continue paying for years.
So, prior to selecting a locality for you house, see if there are any schools, hospitals or parks nearby. These are indicators that the area is decent and will provide better resale worth. Ask local people about the demographics and attitude of the population here. However, one thing about the locality cannot be known till you reside in the house for some years – the unbearable eccentricities of your neighbors.
Here, if they are really painful, renters can move immediately to some other locality, state, r even country. But you are trapped.
So, better be informed than trapped. Ask the storekeeper, the gatekeeper, or any other men whom you think you can extract info from.
You think you love renovations
Many people believe its fun renovating things, after they buy a new home. The walls of your bedroom are covered with posters because the wallpaper is ragged. The flooring in some part of your house is missing because 20 years ago, a kid used his father’s baseball bat not as it is supposed to be.
The realtor’s views about this house are what attracted you. She says the house is yet to be decorated by you elegant touch. The walls are waiting to be painted by your favorite magenta color. You can modernize the lavatory and the kitchen in your own way. And yes, you can also build your lovely veranda.
True. But this redesigning and remodeling can comes with a cost. Include these items when you plan a budget for you new house. And get ready to run along with the handyman for many sleepless nights and strenuous days. This renovation would be your full time job without income until you get your house ‘designed’ your way. If this is what you call fun, then buy that house today. If no, then look for a house that’s been erected in the last few years necessitating little renewals.
No, I am not asking you to be scared if you are a new buyer. Just try to do it considering the above points and chances are high that you will get the best deal. A home is like a parent for an individual. Would you choose a dreadful parent? No one would.
The reason why our economy is suffering today is due to few bad choices of houses by few new home buyers. So decide with utmost care.