Dos and Don'ts When Buying a House

Owning a nice home is one of the biggest dreams for most people, especially young couples who want to settle down and build their family. Yet deciding to buy a home could be extremely tricky as it involves a large financial transaction along with an array of legal procedures. An error in any steps during the buying process could cost you an arm and a leg. Don’t get me wrong. I am not trying to scare you of buying a home. What I am telling you is that it is important for you to understand some of the key aspects in buying a home. Below, I list down some Dos and Don’ts that a home buyer need to know.

Dos

1. Find an experienced real estate agent to represent you as a buyer

It is generally believed that real estate agents play no significant roles in buying a house—these people just want to collect commissions. To my best understanding, people who say this don’t have a good knowledge of what real estate is all about. They see only one side of the cake. Looking from a real estate agent’s perspective, I would argue that real estate agents indeed play significant role in home buying for a number of reasons. First of all, experienced real estate agents can tell you the number of properties that are currently available in the market, within a certain price range.
They can explain you their critical analysis such as which houses are above the market price, which are forced-sales and which price is the best.   You can save a lot of time wandering along the roads to get the above information. Secondly, you are worry-free about setting appointments with house owners. Real estate people will do all the things to get you to inspect the house you want. Real estate agents can be your efficient time-savers. Finally, real estate agents will give you all the details about the house you want such as the size of the house, the number of bedrooms and bathrooms, and the like. They can present the information to you in an organized format. You can also use the information of different houses to compare. As I tell you, real estate agents can help you a lot. So, it is very beneficial for you to find an experienced one.

2. Make sure that you have the ability to buy

A number of buyers want to buy a home when they don’t even have a dollar in their bank account. They rely on the bank to get the loan. This isn’t right at all! Although banks can provide you the loan for buying a home (we call it mortgage), you are also required to pay the deposits or down payment. Down payment means an amount of money that you pay at the time that you buy a house, but which is only a part of the total cost of that house. It should also be noted that when you get the loan from the bank, you will have to pay the interests. The interests could accumulate over time and you could fall into debts if you cannot pay it off. Thus, if you haven’t had enough money, don’t rush to buy a home. Wait until you are financially capable.

3. List down all your requirements for your new home

It is very common that the styles of the house vary from time to time. Some houses have a big balcony, while some others have a small one. Some houses have a bathroom in each bedroom, whereas some have a bathroom outside bedrooms (shared bathrooms). A lot of differences could be found in different houses. So in order for you to get the nicest house you want, I suggest you list down what your requirements are for your new home. Your requirements list may look like this:

    Requirements card:

-  Bedroom: 5 (I have five family members)

-  Bathroom: 6 (bathroom in each room and one for guests)

-  Big balcony so that I can hang flowers

-  Terrace should be suitable for parking my car

-  My neighborhood should be quiet and safe etc.

This above requirement card can be a useful tool for your home hunting and it could save you from regret of buying a wrong house.

Don’ts

1. Don’t buy a house that has title problems

The significant part of home buying is title transferring. It means changing the ownership from the owner’s name to the buyer’s name. There could be some problems in the title of the property. Some owners have their titles locked up with a bank because they cannot pay off the debts. Some owners have only soft title which cannot be converted into hard title because their property is located in an area where the government doesn’t issue hard title. You have to be aware of these issues. Once you decide to buy a particular house, make sure you have done a due diligence on the house. Due diligence means conducting an investigation on a particular property to find out information such as construction permit, title deed, legality etc. Study carefully about the house before you deposit the money and sign the agreement.

2. Don’t just sign the agreement

When buying a home, you will have to sign an agreement, commonly called Sales and Purchase Agreement or SPA. This agreement will legally bind you to the terms and conditions stated. Those terms and conditions can be complicated, especially to those who have no background in laws or cannot understand legal terms. So, when you find those terms and conditions unfavorable, don’t sign the agreement yet. Find an experienced lawyer to give you the advice on what actions you need to take. In some cases, real estate agents can also help you solve this problem.

3. Don’t offer the price too quickly

As I have already stated, buying a home involves a large amount of money, which makes it difficult for you to make a decision. Moreover, because losing money is the thing that no one wants to happen, you need to be extra careful when you offer the price to the owner. Although most buyers would offer the price lower than the asking price, wrong offers can still happen. The point is that the seller generally set the price higher than the market price to keep some room for negotiation. So if you don’t know the market price range, you may offer the price above the range, which could be a very expensive act. It is still a good piece of advice for you to study the market carefully before offering the price to the seller.