Avoid These Mistakes When Buying Your First Home

Oct 31, 2017

Avoid these mistakes when buying your first home

The singles biggest investment one will make in one’s lifetime is buying a home. Whether you are a young, middle-income couple looking to move into a cozy BTO or a matured resale HDB flats. It’s a complicated process which requires some groundwork. Fret not, take it like an exam, the more well prepared you are, the lesser mistakes you’ll avoid when buying your first nest to settled in.

Here are some mistakes to avoid when buying your first home

#1-Eligibility checker

Before deciding your very first property, there are criteria you will need to fulfil especially if you are eyeing on BTO or resale HDB flat. As for private property buyers, you would only have to get your eligibility check from the banks for the right loan package. By the time you’re able to afford the property, you may not pass off to buy any BTO flats or resale HDB as your criteria did not fulfil the Housing Development Board’s checklist as a potential property owner.

#2-Overlooking the “added” cost

There are fees and charges that first-time buyers might not be aware of during the process of buying house. Apart from taking into account of the property’s purchase price, there are other costs such as buyer stamp duty fees, property taxes, property valuation reports, property agent commissions, or even home or fire insurance fees. All these fees and charges are not even including the renovation costs, especially if you’re considering a resale property. By getting your sums properly checked on all the property related fees, you’re able to have clearer budget. On top of that, you could also work with banks to get detailed loan assessment done. For example, to determine your loan and monthly mortgage costs. Surely, you will start asking your affordability on your dream house before you start your showroom visitations.

#3-Not engaging a real estate agent to find your home

Although you may be hesitant to pay real estate agent’s commission by trusting your home-find skills. And it Is true enough that you could easily browse through property listings site like PropertyGuru to find your dream home. But, there’s nothing quite like having professional advice from someone with in-depth knowledge of the market. They spend their days working on the ground and the best ones understand the sale in your desired location at their finger tips. The real estate agents can offer tips, insights and market analyses for you to make sound decision when purchasing your first home, ensuring that you get the best deal, regardless resale HDB market or new condominium projects.

#4-Not considering the future resale and rental value of the property

Not surprising that most first-time property buyers tend to lean on the optimistic side since a property is the most expensive thing you will ever buy. You hope to flip for some profit when most of your life savings have been invested into this starter home. Well, it is not wrong to be on the upside about it, let’s just buffer for some cautions. Resale market may fluctuate in cycles, so don’t be shock but be patient for when the time comes, the time comes. A tip to share: look for properties which are near offices, transport hubs (like MRT) and schools leading to better capital appreciation. Ultimately, the home that you buy is for you to live in and do keep a regular maintenance costs on the house.

#5-Saving on house inspection process

Buying new home for the first time, is one of the major milestones in life. Hence, a careful inspection of the house is needed prior committing to purchase especially when buying resale HDB flats. With this action done, you are able to save money in the long run.

Some helpful tips:

Identify the pre-existing and potential defects that may incur significant repair costs.
Be sure to check each and every room, specifically the entire space and the wood flooring that might harbour a pest infestation that would be costly to eradicate.
Sunrise and sunset directions may affect your electricity bills as it needed to cool space during the afternoon heat.

Click here for a longer list of the checklist.

#6-Not getting a loan Approval-in-Principle

Lastly, to protect your deposit, you will need a Loan Approval-in-Principle (AIP), which will be forfeited if banks turn down your loan application. It will save you time as it helps to narrow down your search to homes based on your affordability. In general, buying customers with AIPs have the power as sellers or their agents are more willing to engage in a negotiation. Letting the good property to slip away is the last thing you want to happen because you are not ready to commit to the deal without your loan AIP. So, apply the loan here before heading out to buy your property. As it is free and without obligations, it’s a wise move for sure.

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