Whether you are looking to purchase a your first home, or your next home, you’ll really want to consider these 3 things before you get your self into trouble. These 3 mistakes have contributed to countless cases of buyers remorse, and you need to understand them in order to be able to avoid them. So here they are:
1. Getting Emotional
This is the most costly mistake that home buyers (really any kind of buying) make. Emotion leads to irrational thinking, which leads to poor decision making, and you end up with buyers remorse, or feeling terrible and possibly resentful at your purchase decision and the people involved in it.
So how do you overcome this monster?
The best way to overcome it, is to take enough time before making your decision. Do not sign a contract on a new home the same day that you look at it. Take some time to evaluate all of your goals and dreams about this home before you buy it. Write down everything you want the new home to achieve, and carefully inspect the data on the home to make sure it meets your requirements.
2. Only Looking at the “Payment”
This one may sound a little strange, so let me elaborate. There are so many more things to consider regarding the cost involved in buying a new home. Interest rates (fixed versus adjustable), closing costs, move in costs, and loan duration are all factors. And in most cases, if the agent knows that all you care about is being able to buy a home and pay only $X per month, then chances are that you will end up getting a home for that amount. But what if the loan ends up being 40 years? Or what if you are put into a balloon payment loan, and after 10 years, all of the sudden you have to pay the balance of the loan? These situations are real, and many people have lost their homes due to problems like these.
So to overcome it, talk to a bank first. Ask them about different types of loans, and have them take you through the details of how the life of the loan would work, and all of the costs involved. Sometimes, it is hard to understand, but a good loan officer will help make it easier. In the end, you might just have the right person to secure the loan for you.
3. Failing to Consider Key Factors in the Prospective Neighborhood
There are many factors outside of the property itself that you need to consider. Things like what school district it falls in, does it have an HOA (home owners association, which almost always means recurring annual fees, sometimes hundreds of dollars per year), what the neighbors are like, is it close to a train or bus station, the proximity of police and fire stations, are all factors that should be considered before buying that new home.
In short, you really need to do your home work before signing away. And consider getting your own real estate license too, as it can save you quite a bit of money on your new home purchase. Have fun shopping for your new home, and be smart about it!