In this time of crisis, if you want to buy a cheap house, it is better to respect some basic rules to avoid making any mistakes. Here are the mistakes to avoid when buying a home.
1. Not knowing your limits
Love blinds you, even when it comes to a real estate crush. When you are looking for a property, you will soon start to compare the surfaces of the kitchens, the tiles in the bathroom or the orientation of the garden. And we often tend to make development projects for a budget that is still unknown, and which may prove to be unaffordable. Think carefully about what you can afford to buy before you fall in love with a house that could turn into a real bottomless financial pit.
2. Let your emotions be seen
Once you have found the (affordable) house of your dreams, don’t be too enthusiastic. Even if you’re crazy about it, don’t show it to the seller. If so, you would not be able to negotiate a price lower than the asking price.
3. Underestimate the costs of housing
When buying a house, it is not uncommon to reach or even exceed the financial limit set. Before estimating the total cost of a dwelling, you will need to consider any repairs, provisions or costs. Damaged gutters can mean replacing the roof. When drawing up your budget, allow a margin to deal with this type of work. Every year, try to save 1% of the total value of the house for unexpected costs.
4. Underestimate (tax) charges
There are many tax advantages when you buy. Unfortunately, some charges are not always sufficiently taken into account. Registration fees, notary fees, cadastral income, property tax, additional centimes,… These are terms you’ve probably heard, without giving them any importance. But you should include them in your cost estimate. A commune is not the other, a neighbourhood is not the other. Even the sidewalk opposite could be more interesting financially… Click here to learn some tax tips.
5. Thinking that your first offer will be accepted
Even if prices have dropped, it is utopian to think that your first offer would be accepted without discussion. You will probably be entitled to a few rounds of negotiations. A motto that is often confirmed: “by persevering, you can do anything.”
6. No longer know how to make a distinction
Avoid getting too excited. If you are at a stage where all the defects seem minimal to you (cracks can be easily filled, the water in the cellar will dry out in summer,…), it is better to call in an expert. Or at least to someone you know who can look at the property without being directly involved in the purchase.
7. Too much, too fast
If this is your first home purchase, it probably won’t be your last. Think long-term. The construction of the pool you’ve been dreaming of since childhood may not be for a while. This can also be done later, possibly when making another purchase. And even more so at the moment, when we don’t yet know how the real estate market will evolve, so avoid
making large expenses without being sure of their real added value. A designer kitchen, a garage, a veranda, a terrace, an open fire, a swimming pool, a garden shed, an additional plot of land… do you really need all this now? Make sure you live comfortably and spread out the big purchases and works over time. Your wallet and motivation will be better off.
8. First the wishes, then the needs
You must give more importance to needs than wishes, especially if this is your first home. If you don’t have a job yet, wait until you have one so you can evaluate what you can afford. Do you have children? Try to find a place that is suitable for them. Do your grandparents take care of your children after school? Look for accommodation near the school. Are you looking for a place that suits you for years? Think of mobility and the proximity of public transport. By preparing your list of arguments, you will know what to choose from: the city/country, an apartment/house, a specific region. Only then can you begin your research.
9. Good loan, bad credit balance insurance
You should always compare the offers of several banks before making a decision. And of course, it will be the one that proposes the most interesting rate that will win. Nevertheless, beware of ancillary products that could cost you dearly: savings accounts, life insurance, fire insurance, provisions,… In addition, you are not obliged to take out fire insurance or life insurance with the same bank. You can negotiate these contracts with other banks or brokers.
10. No insurance against loss of income
The monthly repayment of mortgage credit is an important part of a household’s budget. When you are embarked on a real estate adventure and lose your job, the financial situation can quickly become inextricable.