How many times have you seen an advertisement for a million dollar home on the Internet and were left starry eyed only to be disappointed by the reality of its price? Well, there is good news for you. You are not alone. Being starry eyed is nothing compared to the numerous incidents of people who end up paying huge amounts of money for homes that don’t even deserve half of that amount.
The common denominator between all these people is the fact that all of them are buying their homes for first time. So if you also belong to the same league, knowing the most common mistakes made by first-time home buyers can help you avoid making these mistakes yourself and also evaluate the worth of the home you’re considering in a better manner:
1. Falling In Love With Unnecessary Perks
When you are out in the market searching for a luxurious home, you will see a number of listings with outrageous prices owing to the benefits that they are offering with the house. These benefits range from having a swimming pool to a wine cellar in the basement of the house. Think carefully. Do you actually need these benefits in the house or are you just running after them because you have been seeing them in movies.
Even if you can afford the mortgage of the house with all these luxury benefits, you will need to pay an increased insurance premium if your home includes them. The insurance companies commonly refer these to as ‘attractive nuisance’. Also, take into account the fact that you can always add these perks to your home later instead of paying for them though your nose right now when you can’t really afford them. Why pay an outrageous amount for a second hand item when you can own a new piece at cheaper rates?
2. Ignoring The Cost Of Maintenance
What is the one thing that a decent house with no front garden has and a palatial house with acres of garden doesn’t have? The monetary savings from all the lawn maintenance and snow removing equipment and the wages of the people hired to do all this work.
This is what you must remember when you are thinking of buying a house that has a host of luxuries. Most people tend to max out on their lending capabilities (and the subsequent repayment capabilities) by taking out a mortgage for financing their dream palatial home. They tend to ignore the costs of maintenance and repairs that the house will incur over the years. This is why real estate experts recommend that the cost of the house that you buy should be lower than what you can afford. This will leave you with money for regular maintenance and repair.
These 2 are the most common mistakes that first time home buyers sometimes make. Add to this, a host of other usual mistakes, such as not calculating the tax that you will need to pay, not calculating the insurance premium payments and other similar mistakes and you will find out why are there so many foreclosed properties in the market. To read about these mistakes in detail, you can click here to visit www.bankoftheinternet.com.