For most people, the home that they purchase is the biggest expense of their lifetime, and unless you make a cash offer for a home, you’re committing to a decades-long payment plan.
It’s not uncommon for people to hesitate to purchase a home based on fear of overpaying or losing money during the course of their mortgage. If you’ve experienced those fears, consider these 5 tips before purchasing a home.
1. Purchase for Profit
It is possible to buy a home and make a profit right from the start. Depending on how motivated the sellers are, you may be able to purchase a home that is worth more than what you paid for it if you act quickly.
2. Buy With Investment in Mind
Don’t buy your first home with the idea of reselling it. Consider renting the property out when it’s time to move on. Depending on where you purchase, there may be strong demand for rental properties. If that’s the case, you might be able to rent your home for more than the amount of your mortgage, turning it into an income investment.
3. Know the Numbers
Become intimately familiar with the price of homes in the area you seek. Use Zillow, Redfin, or your agent’s email alerts to see the daily new listings, pendings, and solds to get an idea of what moves quickly and what doesn’t. You’ll soon know a good deal when you see it and have the confidence to act.
4. Get an Inspection
To know if a home that you’re considering is worth it, be sure you get a property inspection. A licensed inspector knows how to locate hidden defects in a home, and armed with that type of information ensures that you don’t overpay for any property.
5. Purchase for the Long Term
Many people end up losing money on their home purchase because they fall in love with the first property they find, buy impulsively, and neglect to consider other options. When you succumb to the fear of missing out and fail to realize that there will always be another home, you risk overpaying for the first thing you see.
An agent I know had a client recently who got a great deal on a property.
The sellers were forced to sell due to job relocation and put their house on the market for below market price. Her client quickly purchased the home, even though it didn’t meet all of her requirements.
But within a matter of months, the client decided she really didn’t like the house after all and put it back on the market. Fortunately, she was able to sell for nearly $50,000 more than she paid.
Keep in mind, though, that this doesn’t always happen.
More often people have to sell for the same or less and end up losing money after factoring in transaction costs.
Helping clients understand the pros and cons of purchase decisions is just one way I provide perspective on the risks of investing in real estate.
If you want to go from renting to owning with clarity and confidence so that you can build wealth, control your environment, and enjoy the comforts of home, comment below or book a call.
About Diane Cohn
Diane Cohn runs a mastermind for anxious millennials who want to go from renting to owning with clarity and confidence so that they can build wealth, control their environment, and enjoy the comforts of home. A prior top-producing Realtor, real estate industry marketing executive, and housing market commentator on YouTube, she has profitably bought and sold property in every kind of market over 30+ years.