Kristen Meleedy, CBR's Blog
Buying a home ranks among the largest purchases everyday people make in their entire lifetimes. If you have gone through the process at least once, you probably gained some valuable life lessons. Whether it’s time to purchase a larger home for a growing family or downsize to a more manageable living space, there are pitfalls that trip up even experienced homebuyers. These rank among the unforeseen issues that can cause setbacks and ways to avoid them.
1: Overcompensating For Past Regrets
When buyers search for their next home, it’s not uncommon to be driven by the perceived shortcomings of the last. For example, you bought a property that had all the living space you need. This may have included a home office, attached garage, and plenty of room to entertain guests. The downside may have been a lack of outdoor living space. Driven by the desire to have a veranda, deck, or big yard, emotion may cause you to compromise on other musts. It may be in your best interest to make a checklist of your needs and be certain you won’t experience buyer’s regret, a second time.
2: Skipping Contingency Planning
It’s not unusual for people to see properties moving quickly in their area and become overconfident yours won’t sit on the market long. The common mistake is to move forward and buy your dream home while expecting only a short period of holding two mortgages. If for some odd reason the market goes dormant in your neighborhood, the financial implications could prove disastrous.
The flipside is selling your hot property and renting as a stop-gap measure. Low housing inventories and competitive markets could land you in a pinch, and home-ownerless for an extended period. These are the reasons why people rely on contingency plans. Craft a deal that sets the homes up like a series of dominoes. When one sells, they all move, and you spend only one day relocating instead of many in a tight spot. Contingencies provide security and stability.
3: Forecasting A Neighborhood’s Future
No homebuyer or real estate professional has a crystal ball that accurately predicts a property’s value. But there is plenty of hard data that can be used to indicate whether a neighborhood is trending in the positive or negative. This may be particularly true in 2020.
Potential homebuyers can look at the pricing that includes listing, sales, and valuations that began before the last recession and lending crisis. You can expect to see a decline in these measures during that rough period. But these days, the economy is robust in many areas. How the property, and surrounding area, performed coming out of the recession could be a telltale sign of where values are heading. The point is to conduct thorough due diligence about the home and others in the neighborhood. Making an informed decision is critical to purchasing a property, regardless of whether you’re a newbie or seasoned homebuyer.