Financial stress is horrific. It tears
families apart. The most important financial question to ask
yourself, before you buy a home, is: "What's the worst
that can happen?" What if interest rates rise? What happens
if you buy based on two incomes and you lose one income? Think
of the future. Your financial limit today will rarely be the
same as your financial limit in the future. Sure, it might
be better. But what if it's not? What if things get worse?
Play it safe. Make sure that when you buy a home, you will
be able to keep your home.
There are TWO kinds of buyers: Those who buy what they want,
and those who buy what they need. The public world of materialism
is often a private world of financial stress. Do you need
four or five bedrooms? Do you need to live in the "best"
area? You can buy a better home in a less expensive - and
less prestigious - area. What's more important - struggling
to maintain an image of wealth or living safely within your
means? Most buyers could save tens, even hundreds, of thousands
of dollars by buying what they need instead of what they want.
Think about it. Be careful.
|
 |
|
|
The extra costs of buying a home can
add as much as ten percent to your purchase price. In some
States, the government stamp duty climbs as high as six percent
of the price. Will you need money for inclusions for your
home, items such as carpets and curtains? And then there are
the hidden costs of ownership - rates, taxes, insurance and
maintenance. These can add up to thousands of dollars - all
of which are constant costs. The price you pay for your home
is not your final cost, it's the first of many costs. Know
what they are and make sure you can afford them.
|
There are few things worse than discovering,
after you have bought, that you could have bought better. If you
intend to live in your home for many years, take some time to check
out the area before you buy. Visit the area and make sure you like
it. Check the prices of recent sales in the area. When you find
the home you love, don't be shy about inspecting it more than once.
The more you see a home before you buy it, the more you'll know
if it's the right home for you. And, finally, check out the neighbours.
Research is always time and money well spent.
Before you find the right home, find the right agent - one who will
listen to you and one who is prepared to help you find the right
home. Sure, agents are paid by sellers, but this is no excuse for
the widespread apathy, deceit and rudeness shown towards buyers.
All agents are not the same. Try to find one who will sit down and
discuss your needs with you. It is a mistake to think that you have
to tolerate poor service. An agent who is courteous and caring will
make all the difference to you.
|
One of the most unethical tricks in
real estate is advertising a home at a price well below its
real price. Thousands of buyers get their hopes up, only to
discover that the home they love was never in their price
range. Advertisements which say "price range" or
"offers above" or "bidding to start from"
are usually misleading. The agents will use the excuse of
the "market" to cover their lies. Be very careful
- financially and emotionally - when you see "quotes"
about likely selling prices. Most times, it's just a bait
to lure you. Take the bait and you'll almost certainly get
hurt in one way or another.
|
 |
While you can often buy at a lower price with
auctions, your challenge is discovering the truth about the likely
selling price. At auctions, thousands of home buyers lose money
through legal and inspection costs for homes they never had a chance
of buying. When they realise they have been tricked it breaks their
hearts. Auctions can be deceitful and cruel. Unless you know what
you are doing, it may be best to do what many buyers do - forget
about buying at auction. If you must bid at auction, learn the "7
Rules of Buying at Auction" - (see page 38 of the book, Real
Estate Mistakes, available in most bookshops or view the web site
www.ethicsinrealestate.com.
Sometimes after you make an offer and it is verbally "accepted",
another buyer will offer more. No matter what you are told, you
have never legally purchased a home until both you and the owner
sign a legally binding contract. Until this happens, remember five
words: Don't Get Your Hopes Up. One way to reduce the risk of being
gazumped is to meet the owners. At the very least, ask the agent
to confirm that should another buyer make an offer higher than yours,
you will be given the chance to increase your offer before the home
is sold to the other buyer.
If you decide to make an offer for a home you like, be aware that
the lower your offer the less chance you will have of buying the
home. Often it is best to make one offer - your best offer. Make
it in writing and state that you either can not or will not pay
any more. Be careful playing the 'bluffing' game, it can easily
backfire on you. Decide which is more important - the home you love
or the price you will pay. You don't have to pay more than you can
afford, just don't be too clever or else you may miss the chance
to buy the home you love.
It is essential - for your financial and emotional
safety - that you obtain an independent building inspection report.
Be sure you discover any major faults before you buy the home. The
biggest word to remember is the word "INDEPENDENT". Be
careful using anyone recommended by the agent. Some agents receive
kickbacks from advisors they recommend. Also, be sure to get legal
advice before you sign anything. It is madness to make one of the
biggest financial decisions of your life without independent advice.
If in doubt about the price, consider obtaining a valuation. The
hundreds of dollars you spend could easily save you thousands of
dollars. Spend it.
 |
The right time to buy a home is when
you find the right home at a price you can afford. This can
happen on the first day you start looking or it can take weeks,
even months, of painstaking effort. Don't hesitate to buy
if you find the right home; but, also, don't be pushed into
making a hasty decision. No matter what you might think, you
will always find another home. Take the time to make sure
everything feels right and that everything checks out right.
Whenever this happens, be it on the first day or after several
weeks, it is then the right time to buy.
|
Despite all the negative publicity, thousands of consumers are caught
with investment scams. Be very wary of "free" offers,
such as investment seminars or trips to inspect property in distant
areas. No matter how good these offers seem, many are a nasty con
where consumers are tricked into buying properties at hugely inflated
prices. Often, it is not until they try to sell that they discover
how badly they have been duped. Be wary of anyone who is trying
to sell you something because it is a "good investment"
or it has "tax benefits" or a "guarantee". Do
your research and don't sign anything without getting independent
advice.
If you have a bad real estate experience you must complain. Often
the louder you complain the more chance you will have of being compensated.
At the very least, you will be helping other buyers to avoid making
the same mistakes. Remember, too, that real estate institutes represent
real estate agents not consumers. Complain to your lawyer or to
the Department of Fair Trading or the ACCC.
If you wish to tell your story, please click
here or you can also contact The Jenman Group
on 1800 1800 18. We will do our best to help you.
|
