Monday, September 5, 2011
Common 'House Buying' Blunders...
I've recently ran across an article within the personal finance section at MSN, called "10 first-time home buyer mistakes." It got me to thinking a little bit, mainly because I've been contemplating over buying the house that I've been paying rent for. Also, I've heard of several 'house buying' blunders that people often make, and I want to be totally sure before I go to the bank and get that dreaded house loan...
Paying rent is commonly known as "throwing your money away," but I don't think it is, in all cases. For one, you can up and leave anytime you want, you're not responsible for house repairs, and so on. However, in the long run (especially if you stay in the same location or city) you can easily say that paying rent for years and years is definitely throwing your money away and it's basically an empty investment into, uh, nothing.
Plus, one way you can look at buying a house, trailer or whatever, is the "rent to own" concept. If you get a loan for 20 or 30 years, chances are that your monthly payments are going to be a lot cheaper than the inflated renting rates of today. The downside to this, is that you'll have to maintain house insurance and be liable for repairs and damages, etc., and by getting a loan for that many years, it will equal a lot more money via the lovely interest charges. Oh, one more negative is, of course, if you decide to quit paying for the house, ruin your credit and jump ship (in this case, jump house; ha!), you'll not only lose the monthly investments you made - which are no big deal, since you'd have to pay rent anyway - you'll lose that big chunk of cash you had to pay up front to get the loan, along with the closing costs that you paid initially, etc.
Anyway, back to the original subject...
I'm going to provide links to 3 sites that are talking about possible blunders / mistakes that are quite common - when it comes to buying a house.
"A house is probably the biggest purchase you'll ever make. And, if you can avoid these missteps, chances are you'll be happy with the home you choose." Read more, here: http://money.msn.com/home-loans/10-first-time-homebuyer-mistakes-investopedia.aspx?gt1=33032 [link is no longer active]
"Buying a house is the largest investment most people ever make. Yet all too often it’s a decision made in haste without adequate preparation. Use our list of common house-buying mistakes to avoid costly regrets." Read more, here: http://www.lendingtree.com/smartborrower/first-time-home-buyers/buying/top-10-house-buying-mistakes/ [link is no longer active]
"Buying a house covers a lot of ground - including legal, financial and emotional considerations. To not educate yourself and learn from the mistakes of others only sets you up to be at best disappointed and at worst finding yourself living in the wrong house. We have listed some of the most prevalent - and potentially dangerous and expensive - mistakes made by first time home buyers." Read more, here: http://www.ourfamilyplace.com/homebuyer/mistakes.html
Well, I hope those 3 resource links may at least be of some help for the home-buying newbies out there. Personally, I don't really need a top-10 list of house-buying blunders and whatnot, just a little common sense, but either way, we can all learn through mistakes - whether it is your own or other people's goofs, screw-ups, or however you want to say it.
My simple advice is:
1) Is your desire bigger than your wallet? Yeah, simple stuff like: Can I actually afford this sucker?
2) Look around, open your eyes and check out the surroundings. If it is a neighborhood, think of how it may be in a few years. Does it mainly consist of run-down rental property? Are you going to need to put up a privacy fence here? Does the land space (your yard) meet your requirements and possible future projects such as storage buildings, a garage, garden space, etc.
3) Is the roof in good shape? A house is nothing without its top. Over time, a leaking roof, even minuscule leaks, can cause a lot of damage to the ceilings inside - which will ultimately lead to other interior disasters later on.
4) Is the floor in good shape? Weak floors are common in older houses - especially in trailers. You don't want to pay a lot of money for a home that needs thousands of dollars of work done to it, as soon as you move in!
5) Is the property that you're interested in buying, located within a flood zone? This stuff happens, and often times the Bank will make you take out an additional insurance called "flood insurance" if the house is in a high-risk area. Plus, do you feel safe living in an area that could possibly flood? The weather seems to be crazier than ever nowadays, and a couple years ago I knew a few home owners who lost thousands of dollars due to a flood that was fueled by torrential downpours. Regardless, it's something to think about when buying a home...
6) This is a no-brainer: Do you like the damn house on the inside? Many people, while being desperate to buy a house with a good price, will often start thinking "I can make it work" or "this will do" or "maybe if we do this, it will be fine," along with other thoughts that relate to compromising. In simple terms, if the kitchen is too small, the bathroom sucks, and the rooms are too close together, and so on, just maybe you don't really like it. Unless you're getting one hell of a deal, I wouldn't compromise when it comes to buying a house. You may not like every aspect of the house, but when you find yourself complaining too much about the living space, the house may not be for you or your family.
7) Is there enough space for family additions? If you already have a mate and the amount of kids you want, this is not an issue. But, for the uncertain ones and/or the couples who are not sure if they would like any "family additions," they might need to go with a house that has an extra room or two that falls within a similar price range as opposed to deciding to have kids in a smaller house and end up getting cramped later on while being stuck in the house they originally bought before planning ahead.
8) If you're buying a home for you and your mate, although you can never be 100% sure about what the future holds, it may be a good idea to check and make sure he/she is somewhat stable and trustworthy at the moment (people can change over time, of course). Lets say you're about to marry some girl who seems to have a fetish for changing her mind every few months or so, always wants to replace furniture, move stuff around - along with other erratic, unstable behavior, etc. If that's the case, unless you're paying for the house in an equal split (50/50), you may want to consider a prenuptial agreement or else you may get totally fucked financially - which tops any of the common 'house buying' blunders out there, if ya know what I mean.
9) What's the potential of this house? Look at it this way: If you make monthly payments on this home for a few years and decide to sell it and move somewhere else, how hard will it be to get your money back or at least most of it back? Better yet, how hard will it be to even sell the place in a slow market? Would you be willing to "reduce for quick sale," if something happened or if you decided to move?
Well, I'm done with my list. Actually, I'm tired of talking about this "buying a house" subject, mainly because I haven't did it yet. It's not like I'm some Real Estate Guru or something, ha-ha!
---End of Post "Common 'House Buying' Blunders..."