Consider the relationship you have with said adviser. If it is someone you look up to, respect, or trust, their word can carry more weight than the foundation of the home you want to buy soon. Imagine finding your dream home only to have your parents or a mentor tell you “that house won’t be worth a penny in five years” or “if I were you I would consider a neighborhood further away from downtown”. That kind of biased opinion can weigh heavily on your home buying decision, but it might be time to take those treasured opinions from friends and family members with a grain of salt.
At the end of the day, this is your home. Whether you want hardwood floors or carpeting throughout is your business. The neighborhood you want to plant your roots down in will be your neighborhood. Letting potentially bad advice affect your own move can be truly hazardous, so here are a few pieces of commonly given advice that should be taken cautiously, or ignored altogether.
“Just get your mortgage where you bank.”
If you are going to shop around for the best deal on a home, why not shop around for the best mortgage rates? Keep in mind that this purchase will have a long-term effect on almost all of your future financial endeavors, so take your time, have a look around, and choose the bank with the most favorable terms. Even though you have your checking and savings accounts stored in a nice big, corporate bank, sometimes the smaller venues will give you a smaller interest rate, making it easier to pay off the home in the long run. There will even be times when this situation is reversed. Don’t let a false sense of convenience cloud your judgment. Banking with one institution doesn’t make them a one-stop shop. Having an existing relationship with the bank doesn’t necessarily mean they will give you the best rates. If you’re concerned about damaging your relationship with your current bank think to yourself... don’t be. A bank that truly cares for its stakeholders will understand if you turn down their offer for a more favorable one and if they don’t, should you really be keeping your money with a bank that doesn’t care about what’s best for you?
“Borrow as much as you’re approved for.”
If the bank is approving you for an amount of money large enough to purchase that dream home, resist the temptation to go for a home that is valued at the maximum amount of your loan. Consider all of the other expenses that you will have to pay for and budget accordingly. It helps to write down a list or spreadsheet of all of your monthly expenses, which will help figure out exactly how much money you can allot to paying for your home. With this budget in mind, it will be easier to determine exactly how much you can afford to spend on your mortgage on a monthly basis, including taxes, insurance and any maintenance fees that may come up. Now that the home is completely yours, all repairs and maintenance will fall squarely on your shoulders, so it’s best not to max out on your mortgage and leave yourself struggling throughout the month or without a safety net. Having this number will narrow down your options, making the selection process, much simpler.
“Don’t bother reading the fine print.”
“If you’re going to buy a home, buy it brand new.”
If you’re shopping for a new home, chances are you’ve at least considered having one built from the ground up. With new neighborhoods popping up on every corner in most growing cities, the idea of being a pioneer in a particular subdivision is quite novel. You would have the rare opportunity to watch your surroundings grow and thrive around you just as your family does. And you would be able to watch all of this from that second story balcony included with your custom floor plan that you selected and saw built from the ground up. There are some drawbacks to this, however, as new home builders can sometimes be seen cutting corners, building on impure concrete and many other offenses that would cause long-term damage to your plan to settle in a brand new neighborhood. Hiring untrained help is also a shortcut some builders have taken as well as using cheaper building materials. Not all builders are like this, but you do have to keep your eyes open! Take care and do your research on your builder, if you do decide to have a home built, make sure to have it inspected thoroughly before you sign any binding paperwork.
“You don’t have to get the home inspected.”
Web descriptions with flowery phrases and carefully crafted articles can only go so far. When looking to purchase a particular home, you should always opt to have it thoroughly and completely inspected by a trained professional. It may seem like an unnecessary expense at first, but consider the consequences of not checking into what a home has to offer, both positive and negative. Imagine buying a home with no inspection and one day noticing a roof leak that eventually turns your basement into an indoor pool (which you ironically decided not to go with because it was an unneeded luxury). That leak is now 100% your problem and the realtor, builder, and bank that financed you will politely apologize and tell you they cannot help you. Having a home inspected may keep you out for a little bit longer, but you wouldn’t buy a car without test driving it. You wouldn’t buy a new outfit without trying it on. So don’t buy a home without having it inspected.
“You don’t need a realtor.”
Buying a home without a realtor is like trying to save money by cutting your own hair. If you are not licensed and trained, it’s a bad idea. A realtor makes their living by providing you with a home and most reputable realtors take this task very seriously. They are a personal aid and valet in the home buying process and will use their knowledge of the field to get you the best deals and make sure the home is absolutely the best choice for you. Chances are, at the very least, you know someone who knows someone in real estate. These connections are how realtors keep their business going, and repeats or referrals take up a large sum of their clientele. Realtors not only want to get you in a home, they also want to potentially sell you another home in the future or sell a home to someone you know who is looking to buy. Maintaining these relationships is key to repeat business, so you can rest assured knowing that a trusted realtor will go to great lengths to make sure you are well taken care of and find a home worthy of your hard-earned money. With all of these points to consider, you should now be able to tune out some of the noise that comes from people who claim to be offering “friendly” advice. Always remember that the decision you make when buying a home lies strictly with you and your family, and when you decide to seek the counsel and services of a realtor, do the proper research and find a realtor with a positive reputation and an excellent track record. If chosen properly, your realtor will make the home buying process as quick and enjoyable as possible.