5 IMPORTANT First-Time Homebuyer Mistakes to Avoid

Welcome back! Today we’re going to talk about the 5 mistakes first-time homebuyers make.

Today we’re going to talk about 5 MAJOR MISTAKES to avoid when you’re buying your first home. Sometimes in your desire to actually buy a property, there are mistakes we easily fall into because we what we thought was simple turns out to be more complicated than what it usually is.

I know buying a property may not be an avenue that you’re really very familiar with because to some, it’s their first time, and even if it’s your 2nd or 3rd time to purchase a property, it may be useful to review some of the concepts below that can help you plan out the future of this purchase.

I hope this article is able to give you more insight as to what pitfalls to avoid, how to choose the first home, and what are the things that you should consider.

There are so many decisions and moving parts and factors related to buying your first home. And we don’t want to make a mistake because buying a home could be one of the largest purchases of your life. And sometimes you’re basing your assumptions on free advice, which could be correct or wrong. But today we want to provide you more clarity so that it will be able to help you make a better decision as far as buying your home is concerned.

1^STMISTAKE: ONLY CONSIDERING THE MONTHLY AMORTIZATION

The first mistake that first-time homebuyers make is thinking about the monthly amortization first. You know it happens normally if you walk in a mall, someone hands you a flier and then they give you, say for example, Php 18,000 only per month at 0% interest. Or you go to a bank, you apply for a bank loan, then you see how much amortization will get and it’s something that can fit into the budget, and then you immediately jump on it. That could be actually wrong. That could actually really hurt you long term because there are so many bigger things that we should consider first before the budget.

What we want to talk to you about is not thinking about the amortization first. There are so many things that you have to consider. Budget is just one of those concerns. It’s also not first on the list, which you will understand much better as you watch more of our videos and read more of our articles.

So what we’re really saying in this first point is that not just because the property amortization works and you feel like you need to invest, does it mean you have to get it?

There are so many other things that you have to look at:

Is the location good?

Is there going to be potential rent in the area?

Is the size okay for you?

Can you use it? What’s the goal of the property purchase?

Can you rent it out?

What are the restrictions?

How do you use the property?

What are the functions that you have in mind in the future?

There are so many things that you have to think about more than the amortization. And that’s one of the first deadliest mistakes that a first time homebuyer makes.

2^ndMISTAKE: NOT THINKING ABOUT MAINTENANCE COSTS

The second deadly mistake a first-time homebuyer makes is not thinking about the maintenance cost. Sometimes when you buy a property and you’re thinking too much about the cost, you forget to think about other important things that you’re actually going to really pay for eventually. For example once you settle in a condominium you have to (of course) factor in association dues, real estate property taxes, sometimes you also have to pay insurancefor the condominium unit or the house depending on your preference, and other unforeseen costs.

If it’s a house you also have to worry about maintenance costs, and this is a regular thing. Costs such as mowing the lawn, garden maintenance, trimming of the plants, cleaning the pool, cleaning on a REGULAR basis, and this is a thing which will involve REGULAR COSTS.

So just because you can buy the property doesn’t mean you have to buy it. You have to think about maintenance as soon as you assume ownership of this property.

So it goes beyond thinking short-term, and it always works if you think long-term in this particular manner, most especially in a property.

A property is always a long-term investment.

So when we’re talking about this, not just because you can afford to buy it doesn’t mean you have to buy it. You have to factor in the maintenance cost which usually involves association dues, taxes, insurance, maintenance of the home, cleaning, all of these things. You have to take these carefully into consideration.

3^rdMISTAKE:  NOT PLANNING LONG-TERM INTO THE FUTURE

The third mistake that first-time homebuyers make is not planning deep enough into the future. You know when you’re buying a property, you’re really actually buying a space. So it’s on a per square meter basis here. In other countries it’s on a per square foot.

You have to be able to determine how much space you would actually need in the next few years. If you feel like you’re going to need this property for a longer amount of time and then you’re at the marrying age and you feel like you’re going to need more space in the future, more rooms for kids, it could be ideal for you and a good idea if you buy a lot, establish a house later on.

There are so many options. But if you intend on a certain area and a small space would work for you, probably a 1-bedroom or a 2-bedroom condominium could probably work.

It really depends on your plan.

The key is not to think short-term, but always think long-term as far as buying a property is concerned.

You know what really works in planning a real estate purchase is buying into the future, planning long-term versus short-term. Because it’s also quite a big amount that you’re going to invest so we can just take this lightly.

Just because somebody gave you a good offer doesn’t mean you have to jump on it. If it is, and sometimes there are really good deals that we can’t just say no to, but as long as you’re able to assess all factors needed then go for it.

But price is not the only determining factor when you’re buying real estate.

It’s also mostly planning into the future – what you REALLY want to do. Do you want to build and sell? Sell the property for a profit? Or do you want to live in it? Do you want to use it? Is the plan to use this for a certain number of years then later on upgrade? Sell it for the profit?

You know it’s really up to you.

But the bottom line here is to plan your space needs. So you don’t just jump on the first deal that’s presented to you. It’s about coming up with a highly defined decision for you and your family.

4^THMISTAKE: USING LIFE SAVINGS AS A DOWNPAYMENT

The fourth deadly mistake that a first-time homebuyer makes is using all of his life savings as a down payment. You never, never use all of your savings as a down payment for a property and then worry about the amortization a month later on. 30 days is such a shortamount of time, most especially nowadays in the digital age. Things are moving so fast. You’ll won’t realize that it’s already the 30^thday and it’s due.

So never use all of your savings as a down payment and then rely on your monthly income as your amortization. You need to have a certain buffer.

If you need to be able to plan this for 3 months 6 months, even better a year ahead, you have to plan the amortization 3-6 months at least ahead.

So that if ever something happens, for example, if you’re able to encounter an accident and you’re not able to do work for at least a month, and you’re not able to produce money, you’re not going to worry about being behind on your payments. You’re prepared to pay at least 3-6 months and you have the time to do something to make more so that you’re able to catch up on your payments. So never use all of your money to put in as a down payment, have a certain buffer, so that in the next 3-6 months you will be able to move and remedy a certain emergency situation.

5^THMISTAKE: NOT GETTING PROFESSIONAL ADVICE / HELP.

The fifth and final advice that I can give to you as a first-time homebuyer is to get professional help. This is not a cheap shot way of injecting a broker in the picture but IT IS YOUR FIRST TIME to actually buy a property.

There are just so many questions that you have to go through. What’s the actual property worth in the area (these are called market values)? What’s the correct price of this property? How will I go through my financing? How much deals are out there? Is there a good deal waiting for me? What’s the correct size waiting for me? What’s the area that can really work? How do we negotiate for a good deal? How do we construct the paper work? Where do we begin? Is this the right format? All of these things could be answered by a REAL PROFESSIONAL (not just some free advice from people who don’t know what they’re doing).

Maybe later on when you get better with this you can do it on your own, but as a first-time homebuyer we actually recommend you to talk to a good professional so that they can help you answer all of these things.

Because sometimes trying to save up or trying to do everything yourself could actually cost you more money in the end.For example, you’re buying a property, you have no idea about the market value in the area, they just told you it’s a good deal, the amortization is okay, and you bought it right away. And then you found out a few months down the line that you bought it overpriced. How much money did you spend for it? There are just so many moving factors as far as a buying decision is concerned when it comes to real estate. It’s not like a normal item that you buy off the rack like clothes, pens, and simple stuff. Real estate, as I always say, is buying into a lifestyle, buying into a home. This is something that you will be personally using and personally living in. So we want to make sure that you’re well taken care of and you think about all of the important factors before finally settling into one important decision.

So all in all, there are so many factors to consider BEFORE buying your first real estate property. There are also many pitfalls, and it’d be best if you consult an experienced professional before pulling the trigger on one property purchase.

We hope today’s article was able to give you a better insight as far as what mistakes to avoid when you’re buying your first home so that (1) you get to avoid all of these pitfalls, (2) you get to save money, and (3) you’re able to get the property of your dreams.

The bottom line we hope through this article, will be able to make the perfect or if not, THE BEST decision for you in your purchase of a real estate property.

SHARE THIS ARTICLE WITH YOUR FRIENDS: