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A large
portion of investors never make it past one or two property purchases –
and it’s not because of their personal income, it’s because they made
the following mistakes:-
1.
Choosing the wrong location: Most first-time investors tend to stay
close to their homes. In making your selection you need to think at
least a little about the factors that affect resale – either positively
or negatively. Research the neighbourhood and pay attention to
marketable details of the house, such as proximity to transportation,
shopping, schools, parks, planned developments and even local crime
statistics.
2. Emotion
over reason: Buying your first home is an emotional moment and one you
should be excited about, but you must keep your head. Don't let your
“love” for a prospective home cause you to become overexcited and lose
your common sense. You may end up buying the wrong house or paying too
much for it.
3. Settling: Sort of the opposite of overbuying, don't “settle” for a
house when there are likely better options available. Make sure you do
your research on your finances, the neighbourhood, location and
specifics of the home, so you know you're making an informed choice.
4. Not getting pre-approval for a mortgage: Getting pre-approved
provides peace of mind in that you know what you can afford, which gives
you confidence when it comes time to making an offer and negotiating.
5. Not knowing your mortgage options: While you may feel most
comfortable going straight to your friendly neighbourhood bank for a
mortgage, this may not be where you get your best deal. Finding the
right mortgage can save – or cost – you thousands of dollars, so be sure
to take the time to examine all options – from banks to brokers, and all
the various products available.
6. Overbuying: Real estate experts cite this as the most common mistake
for first-timers – buying more than they should or can afford. Make sure
you have an excellent understanding of all the costs of homeownership
involved, as well as a handle on your other expenses, from credit cards
to personal expenses to car payments or any other commitments.
7. Scrimping on the inspection process: The cost of a professional
inspection is a small price to pay for the peace of mind of knowing your
prospective property is free of major defects.
8. Not reviewing the purchase contract closely: Property purchase
contracts are long and detailed, but it's necessary to review them
carefully, both on your own and with your lawyer. Pay attention to all
clauses, covering everything from inclusions in the sale to closing
dates.
9. Using the wrong Real Estate Agent: For first-time buyers especially,
the services of a qualified and experienced real estate agent are
invaluable. But not all agents are created equal. In the hot markets
over the last several years, more people entered the profession, trying
to cash in on booming sales and commissions. But now, in a more
challenging market, some of these newcomers are becoming part-timers or
leaving the business entirely. In theory, at least, the best and most
experienced realtors will be left standing. Be it through referrals or
your own research, take the time to find a good agent – one who wants
and truly deserves your business.
10. Making an offer prematurely: This often results from buyers getting
too attached to a home too early, without looking at other options,
letting their emotions get the best of them and wanting to snap it up
before someone else does. Be sure you take the time to review the
information on market value for similar homes in the neighbourhood to
ensure you don't overpay.
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