Buyer's Market Doesn't Always Mean Buy
Just because experts say the time is right, doesn't mean such a large investment should be made right now.
Gary Malin, president of Citi-Habitats shared some of his philosophies on what to consider before signing a contracts:
1. Don't let emotions dictate decision-making
Patience is a virtue. Don't make a big decision like buying a home when you're sick of house hunting.
"Do your due diligence to make sure what the listing says is accurate is really accurate," says Malin. "People get tired after deals fall through or they don't quite find what they want after spending a lot of time looking."
2. Don't go at it alone
Trying to shortcut the process to save money can actually cost you more. With the transparency of the Internet, many buyers feel confident that they can find a new home without a broker, as they are especially attracted to the idea of not having to pay a commission. This isn't the best way to cut corners.
"How to Choose a Realtor.")
3. Get to know your neighborhood
That means walking around and checking it out at night and on weekends -- not just a sunny weekday tour of the area.
"People often discover the neighborhood they bought into isn't actually the ideal neighborhood for them once they settle in," says Malin. Make sure to note how commercial your 'hood is, or how quiet. Is it far from work? These details may seem small but are worth analyzing before signing a contract and potentially hating where you live. (Also see: "Buyers Beware: Was That House a Crime Scene?")
4. Don't buy based on price
Buyers tend to focus only on money. If cost is your highest priority you may miss out on details that leave you not loving your new home. (Also see "How to Negotiate a Home Purchase.")
5. Don't believe everything you read (on the Internet especially!)
Just like you shouldn't diagnose your ailments via the Internet, you shouldn't rely on the Internet alone when buying a home.
"There's too much info on there for people," says Malin. "Now people think they are experts in the real estate field when they aren't. You need to be able to interpret and apply that info for effective negotiations." (Also see "How to Find a New Home Online.")
6. But still do plenty of research about the market, and also about yourself
The more info you have, the more informed your decision can be. You should know about developers with bad reputations, crime statistics, the quality of the school system, etc.
"Figure out if you are looking to make a long-term decision or short-term," says Malin. "If you have a three to four year time frame you want to live in the space, then it might not make sense financially to buy. You really have to be willing to live in an apartment or home for at least five years in this market."
7. Arm yourself with a good team
Besides a broker, you should have a good lawyer and accountant.
"You don't want to be locked in spending a significant amount of money and wish you'd had the help of some experts prior," says Malin. (Also see "Closing Costs: No Surprises.")
8. Don't obsess over square footage
Buyers have a tendency to focus on numbers without considering layout and logistics. A high number in square footage isn't going to matter if the layout is inefficient. Have your furniture and lifestyle in mind when looking at a new home.
"You don't box yourself into these tight parameters because you might miss what is actually the best deal for you," says Malin.
9. Ask a lot of questions
Keep asking questions until you get the information you need and you feel comfortable with what you are learning from your broker or agent.
"If you don't get what you want, move onto another person," says Malin. "Always look for a referral. You want someone who can vouch and say they had a good experience."
10. A good price doesn't mean you should buy
A well-priced market may not have any product that you're interested in. Don't settle! And make sure the prices truly work for you. Interest rates and maintenance fees can bust your monthly budget and price you out of the new home experience. (Also see "How Much Home Can I Afford?")
"The idea of 'the bottom' is something people obsess about," says Malin. "History tells us that when you've realized the bottom has hit, you've actually already missed it."
Remember, no one can force you to buy a new home, so the decision is yours -- make it well-thought-out and wise.
For more insights on buying a home see these AOL Real Estateguides:
- First-Time Homebuyer's Guide
- How to Shop for Your First Home
- How to Get a Low Mortgage Rate
- Vacation Homes: Is Now the Time to Buy?
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