This Is the Biggest Mistake a Home Buyer Could Make
Are you in danger of making this costly error when purchasing your property?
- Buying a house is a big financial decision.
- Mistakes in the home-buying process could hurt your finances over the long-term.
- There's one crucial mistake home buyers need to avoid.
When you're buying a house, you need to make certain you're making smart choices. The long-term financial consequences from your decision could be devastating. Unfortunately, many home buyers make a common mistake that ends up costing them a lot.
That error? Thinking with their heart alone since their home is the place where they'll live and raise their family. It's easy to become emotionally invested in your home purchase since you'll be settling down roots. But you need to use your head and make certain the house you're buying is the right financial choice -- not just the best place for you personally.
Here are three big reasons why you shouldn't primarily be governed by your emotions when you choose which house to buy.
1. You could end up overpaying
One of the biggest problems in following your heart when buying a home is that you could end up falling in love with a property and paying the seller more than it's really worth.
This can complicate the process of getting a mortgage loan if the house doesn't appraise for as much money as you've offered for it. It also makes it less likely you would be able to sell the home for what you paid or for a generous profit since others may not be willing to pay the premium you did.
Unfortunately, overpaying for a house is especially likely in the current competitive market where it's common for bidding wars to develop. You must make sure to remember that another perfect property will come along and you don't want to pay more than you should for any given home.
2. You could end up buying a house that won't hold its value
Unfortunately, if you fall in love with a house and don't take the time to consider whether it's a good investment, you may end up with a property that won't hold its value over the long term.
This could happen for a number of reasons. For example, if you buy a house in a bad school district, that may not matter to you if you don't have kids and you love the property, but you'd be limiting your pool of potential future buyers since most parents wouldn't be willing to consider the home.
You could also end up with a house that doesn't hold its value if you overpay for aesthetic features that don't really make a noticeable impact on what the house is worth. For example, you may think the cute tiled dog shower or fancy granite in the kitchen is really neat and may be willing to pay a premium for it. However, other buyers might not, since these features don't really cause the house to be worth more -- unlike, say, an extra bedroom or more square footage.
3. You could end up buying a property you can't really afford
If you decide you really love a particular house, you could end up in a situation where you stretch your budget to afford it. Committing to higher mortgage payments for decades could be a choice you come to regret -- especially if you don't have enough money to do other things.
You don't want to find yourself facing any of these issues, so make sure you evaluate not just whether you really like a house, but also whether it's a good investment likely to appreciate over time.
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