Thursday, January 22, 2015

Five Worst Mistakes First-Time Condo Buyers Make

First published on CondoAsia.ph 

Investing in a condo can be one of your major life achievements; but it can also be one of your biggest downfalls, especially if it’s your first time, and you commit the same mistakes that some people did before buying their first homes.

For your first purchase to be successful, be cautious of your decisions, and avoid these five mistakes:

1. Not Getting Mortgage Approval 

Before purchasing a home, you must first secure a home loan and get your mortgage approved. Sadly, some first-time buyers fail to qualify for a mortgage due to poor credit history. If you’re applying for a mortgage, don’t secure credit for a new car or a bedroom furniture simultaneously. New financial obligations can lower your credit score.

Never co-sign a loan while you’re trying to close a home loan. Don’t act as a guarantor for someone else’s debt. Accumulating more debts can only diminish your mortgage eligibility.

Also don’t accept a new job offer while you’re applying for a mortgage because you will need a steady source of income to prove your liquidity to your lender.

2. Lacking Vision 

Lacking vision simply means not seeing what is about to come. A first-time buyer usually gets too excited about getting a house, but tends to forget the little, yet important, details. Be forward-looking—anticipate problems before they happen.

Besides the mortgage fees, buyers should not also forget to factor in the extra costs when buying a condo, which include taxes, insurances, monthly utility bills, and maintenance expenses.

Know what you can really afford before buying a condo.

Don’t settle on compromises. Again, be forward-looking; don’t decide depending on your current situation. For example, don’t buy a single-bedroom home if you’re planning to have children sometime soon.

3. Paying Extra for Upgrades 

Don’t be fooled by sellers, brokers, and agents who are trying to outsmart you. You don’t need those upgrades (wallpapers, flooring materials) for now. Physical imperfections are quite easy to resolve without spending too much. Minor upgrades, cosmetic fixes are actually inexpensive.

4. Not Doing Condo Inspection 

You need to inspect your future condo inside and out. If there are any adjustments to be made, you may want to reconsider your decision. Don’t spend extra cash on repairs and replacements.

To avoid this mistake, don’t close a sale until you have a concrete, full idea of your prospective property’s soundness and physical condition.

5. Not Hiring An Agent/Not Using Seller’s Agent 

You should hire a real estate agent to guide you throughout the home buying process. Agents, who follow ethical guidelines, should protect both the seller and buyer’s interests. To make sure that will happen, hire an agent for yourself first before dealing with the property seller’s own agent.

Your agent should lead you to various properties that fit your requirements and budget. The seller’s agent, on the other hand, may unearth important information that can guide you to making a wise decision.

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