It’s time to find the home of your dreams. But, before you rush out to talk to a real estate agent, there are a few things you need to do to protect your bank account. It’s unfortunate, but the real estate market is tough. There are so many ways to lose money that it’ll make your head spin. Fortunately, you don’t have to be taken advantage of.
Think About The Resale Value
Before you settle into your new home, before you even put in an offer, think about the resale value of the place. Everyone says that they’re going to die in the house that they buy – especially if it’s their dream home. But, really, most people end up moving at some point. Homes aren’t these anchors that we believe them to be.
If you ever change jobs, or you get tired of the state regulations where you live, or if you just get tired of the weather and you need a change of scenery, you’re going to have to sell the home. At that point, resale value becomes very important. But, it’s something you should be thinking about before you even step over the threshold.
Think About Hidden Costs
The mortgage isn’t the only cost of homeownership. There are lots of costs associated with a house, like maintenance. That’s the stuff that goes on forever – mowing the grass, trimming the shrubs, making sure that the property is kept up. There’s also a small matter of taxes. Every property has property taxes, unless you happen to be lucky enough to live in an area that doesn’t assess them. But, that’s rare.
There’s also insurance. Insurance doesn’t have to be expensive, but it can be – especially if you live in a natural disaster zone. Finally, don’t forget about real estate agent costs. While these costs are often buried in the cost of the home, they’re still a very real cost. Check real estate agent reviews to make sure you’re getting an agent that is both professional and worth the price you’re paying.
Don’t Treat Your Home Like A Speculation In The Stock Market
House flipping makes for great reality T.V., but it’s also more of an exception than the rule in real estate. Don’t walk into your home thinking that you’ll turn around and flip it for a profit. It usually doesn’t work that way. Think of your home as a long-term proposition. You’ll be here for the next 10 or 20 years, possibly 30. Make the most of it, and treat your home as a potential long-term investment.
Be Proactive At Closing
Don’t assume that your real estate agent, or a lawyer, will do everything for you at closing. You should schedule your closing, estimate the final closing costs, and anything else that you can do ahead of time to make the process more streamlined and efficient.
In short, don’t wait for the last minute to look over your documents. You don’t want any surprises at closing, and neither does the seller.
Your Budget Should Be Realistic
You might be able to get a $500,000 interest-only loan, but is this really the best loan for you? Can you really afford to keep up with that mortgage payment? Even if you technically can afford it, do you want to be saddled with that payment for the next 30 years?
Get Pre-Approved For a Loan
Always get pre-approval for a loan. This is the number one mistake new home buyers make. They don’t go to the bank before making offers on a home. This not only frustrates the seller, but it also makes you look unserious. It can also jeopardize your chances of getting the home you really want.