Beginners in real-estate investing and first time home-buyers often experience setbacks when they look for houses to buy. To avoid such dilemmas, which could lead to loss of time, effort and even worse your money; you will learn what common mistakes are made in real-estate and how to avoid them.
1. Lack of research
When buying properties and houses, you would have to go back to the basics: which is doing some research before proceeding with any kind of purchase. Research is basically asking questions about the house or the property. You could ask questions similar to the following to have an idea about the property:
a. Why is this house for sale?
b. What problems if any does the house have that needs repairs?
c. How did the former owner pay for the home… Will the property qualify for a new loan?
d. What are any problems in the area where the property is located… is it in a flood zone, a wetlands with protected wildlife, new zoning rules or freeway being built, etc.
e. What type of employment rate/job growth does this area have?
2. Not considering the bidding and maintenance cost
Your research would also include the price. It is a common scenario when a buyer would tend to offer a higher price for a property that would fit their needs and demands. Before bidding for a property, search for similar houses in the area and how much they sold for in the last few months. It is better to look at houses and properties that were already sold than those houses still up for sale. This is one way to not overbid and still be within market price.
Aside from the upfront price of the house or property, even intelligent buyers often forget to add in the maintenance costs of home-ownership. Without considering the maintenance costs, home-buyers often find themselves buried in debt. Real-estate investors must always keep the expenses in mind when buying property. Since the cost of improving the home definitely has an impact how much an investor will pay for a property. Always get a good home inspector even if it means you pay out-of-pocket for it. An inspector doesn’t guarantee the house will be free of defects. The home inspectors knowledge and experience will give you a heads up about what type of problems and repairs you’ll be walking into before you buy the property. Occasionally defects in the housing will be too much for the average homeowner or investor to handle and they should decline to purchase the property within their inspection period as described in the first purchase contract.
3. Too much waiting
There is nothing wrong with waiting for the right house but a home buyer should be realistic. It’s difficult to find a home that would fit 100% of their needs and demands. Home-buyers who are looking for the perfect home usually overlook homes that would meet nearly all of their standards. Usually, home-buyers who wait around for their perfect home would not notice that the cost of purchasing a home is constantly increasing. To avoid this, it is important to sort out priorities. Identify the top needs and absolute must-haves for the new home.
4. Without any professional assistance
Another mistake that some home-buyers make is that they think they can get a house on their own. There is nothing wrong with buying real estate without any professional help. It is just that it could be very stressful and would take much of your time. Real-estate agents have the resources, contacts, and experience that makes the process almost stress free. Aside from the real-estate agent, if you’re planning on investing in this industry then you would also need a home inspector, title agent or lawyer, a few good lenders, and contractors.