Common Pitfalls of Purchasing

Whether you are purchasing for the first time, wish to upgrade your current residence, or are relocating to a new area, many questions arise, as do emotions. Everyday purchasers make life-altering decisions with less than 20 minutes of dedicated viewing and investigation. Any errors that occur as a result of a lack of planning can seriously hamper your financial standing, and even unduly affect the long-term happiness of your family.

>> Things to consider when buying a house

To outmaneuver and avoid grave errors, take into account the following common pitfalls when purchasing:

1) Paying too much

Without the aid and assistance of a professional Real Estate Agent, purchasers often pay far more than fair market value. It is not uncommon to hear horror stories where thousands of dollars were wasted because the market was unknown. Market areas differ – what you sold your last home for does not necessarily equate to equal pricing structures in your new neighborhood. Your Real Estate Agent will know what is locally considered good value for investment dollar. If you are relocating to a new city, engage the services of a local Real Estate Agent who intimately understands the fluctuating market trends and will provide a comparative market analysis on the home you wish to purchase.

2) Too much of a fixer-upper

You’ve heard the stories or maybe even made the comments yourself, “It’s only superficial, and It won’t take too much money to fix that, we can renovate on the weekends, or I didn’t realize it would consist of hiring a structural repair artist.”
Nightmares happen when you take on more than you can handle. Purchasing a fixer-upper can equate to replacing everything and still ending up with a very expensive brand new old car!

3) Wrong type of neighborhood

Once you locate a home that appears to fit everyone’s needs, take a second look! If you originally viewed the property on a weekend, drive by during weekday rush hour. Check with the local municipal authorities to see if a major highway plan is in the works – one that will produce a backyard oasis of incessant noise. Investigate airport extensions and shopping center improvements. Heavy traffic blaring into your quiet serenity can destroy your solitude.

Consider your outdoor lifestyle. Do you hold family barbecues, enjoy sitting outside, or invite family and friends to vacation with their recreational vehicles in your backyard? In many cases, excessive traffic noise can hamper a quiet conversation by the creek. You many also find out for the first time just how lightly you sleep. There are also the potential toxic fumes leaking from vehicle exhaust. Do you want your children and yourselves breathing this in? It may take only a month or two to realize the grave mistakes you’ve made.

4) Buying outside of your Budget

We are all familiar with more funds going out than what is coming in. Kids these days always want the best regardless of whether they can really afford it or not. It is easy for a Real Estate Agent to nod their head and make the quick commission, fully realizing that one-year later when the marriage is on the rocks that they will be earning another commission as the property is on the market again.

Careful budgeting is the order of the day! First time purchasers be warned that it is very easy to buy beyond your means, as you count on dual incomes until the new baby arrives. It is better to buy the home you need and con comfortably afford than experience being forced to sell and buy down. House rich and cash poor is not the way to experience life!

On the opposite end of the scale is purchasing a home that offers less function and feature than what you really need. Inevitably, you will end up purchasing the right home and have to bear the cost of reselling and moving again.

5) Over or Underestimating Your Housing Needs

A $10,000+ mistake can occur when you purchase with only the immediate timeframe in mind. You opted for no family room, and three months later are delighted to learn your first child is on its way. Or your children all leave home in the same year and now you find yourself rambling around in empty rooms! On the other hand, when parents downsize too early, they find their adult children have rebounded with a few extra additions! Consider all your options carefully. Saving your hard earned money is a definite plan!

6) Retirement & Condo/Apartment Living

You are now both retired from the workplace and are beginning to contemplate that a smaller residence is just what the doctor ordered. No more high maintenance yard work, shoveling snow or too many rooms to clean. A year after moving to what was once just the right size for the two of you, you find yourself missing those workshop projects that the family loves to receive, or tending the garden you spent years creating. Perhaps you are now facing widowhood and the condo walls speak too many memories. Purchasing a condo or apartment too early for your lifestyle is a grave error that can be avoided.

See more: Single family investment property