Posted on: 27 April 2018Share
Buying a home is a long-term commitment. If you commit to an overpriced property, you're stuck with it for the next 20 or 30 years; even worse, it can be financially and emotionally stressful, and may even lead to having your home repossessed. Here's how you can avoid paying too much for a property:
To get a better deal on a home, you need to first get your finances in order. If you have a poor credit rating, you'll pay more in interest on your mortgage, you'll want to pay off your debts first.
You should also prepare a sizable down payment of, say, 20%; this will reduce your monthly payments and mortgage insurance.
Hire a Professional
To avoid being ripped off, engage the services of a buyer's agent. They are familiar with your market and will know when a property is overpriced.
Look at the Statistics
They say numbers don't lie, so look at your area sales stats. How are homes for sale performing? If properties are taking too long to sell it is very likely that they're overpriced.
You can also look at the prices of recently sold homes similar to the one you want to buy. How do the prices compare?
Does the price fit the neighborhood? Consider factors like amenities; schools, hospitals, and entertainment facilities will all add value to the home.
How is the condition of the home? Look at the roofing, plumbing, electrical, as well as the foundation for any signs of problems.
New homes are also typically more expensive because of the increasing cost of land and building materials. You may get a better deal if you buy a similar but older home in the same neighborhood.
When you decide to buy a home, the assumption is that you have a budget. Do not yield to the temptation to go over your budget. If you cannot find what you want within your price range, consider a cheaper neighborhood. You could find a similar but cheaper neighborhood just across the road.
Buying a home is an important process that should never be rushed; but sometimes life's situations, such as a divorce, can put you under pressure to buy a home.
Under such conditions, it's easy to make mistakes like overpaying for your new home. Remember that it's better to rent for a while, rather than making a hurried purchase.
To avoid being ripped off in your home purchase, get your finances in order, and hire a professional. Then shop around, compare prices, inspect the home, take your time, and be flexible throughout the process.