Mistakes First-Time Homebuyers Usually Make – And How To Avoid Them
Ask anyone who’s gone through the process of buying a residential property and there will probably be some things they’ve regretted - be it something they’ve done or failed to do. Adulting is tough enough and buying your first home shouldn’t be an enigma. Here, we share some common mistakes made by those new to the property market, and how to navigate your way around them.
Purchasing on impulse
The adrenaline rush is real when you spot a dream unit that ticks all the boxes, and it probably doesn’t help when the seller’s real estate agent informs you that there are multiple parties interested in it too. That’s when you should take a deep breath and contemplate if the apartment truly suits your needs - is it everything you’re looking for in terms of size, layout, and location? Are you familiar with the area and its nearby amenities yet? Don’t rush the decision-making process - the last thing you’ll want is to experience buyer’s remorse.
Failing to understand the market
Naturally, we’d all love to pay the lowest price possible for the property we’ve got our eye on. However, understanding the supply and demand forces at play is important too. Is today a buyer’s or seller’s market? How much leverage do we get? If demand far exceeds supply, for example, a seller isn’t going to accept a lowball offer. Do your research for the area, and look at the average price range for similar units to get a feel of what the market rate is before making a reasonable offer. Most sellers will list their homes at a price point with some room for negotiation.
Not securing funding ahead of time
It’s a no-brainer that houses are costly. But have you delved properly into the numbers? Aside from the purchase price, you’ll also have to factor in additional costs like stamp duties and renovation expenses. It’s good to have a realistic budget in mind before going shopping, and even better yet if you’ve done your research for applicable home loans, if required. Have all these figured out before you sign on the dotted line for your Option to Purchase - you’ll only have 21 days to exercise the option, and the last thing you’ll want is to forfeit your option fee (usually a four-figure sum) because you can’t afford the property.
Many first-time homebuyers live in the present and fail to consider the future. For example, you may have gone ahead with the purchase because you appreciate the quiet environment of the estate. However, should there be future developments in the vicinity, you will soon be inundated with loud construction noises all day long. Do a quick check of the Urban Redevelopment Authority’s Master Plan and you’ll know if anything is coming up in the next 10 to 15 years. And whilst young couples often opt for smaller matrimonial homes, the lack of space may become an issue should they consider trying for children in future.
Lack of proper inspection
Should you discover a busted pipe or malfunctioning switches upon moving in, you won’t be able to make a claim against the seller nor real estate agent, as they are not required to disclose any defects in the absence of enquiries. Instead, the onus is on the buyer to do his own checks before going ahead with the transaction. This is known as caveat emptor, a Latin phrase that can be roughly translated to “let the buyer beware”. To avoid such headaches, ask all the questions you need during viewings, and get a professional to do a detailed inspection on the condition of the house before committing to it.