How to Avoid Pitfalls when Building or Buying a Home
from wikiHow - The How to Manual That You Can Edit
Buying a home is a complicated process fraught with difficulties. If you want to make sure your home buying or building process is a success, there are some things you can do.
Steps
- Make sure your architect and builder have worked together before and get along well. Whichever one you hire first, ask him to recommend the other. Otherwise all of their little conflicts will cost you plenty. Before you choose either an architect or a builder be sure to check references!
- If a builder is designing your home, try to choose modest changes on a plan that has already been built. If using an architect, this is not the case. Bring a clear idea of your wants and needs. A good architect will design a plan that suits you better than any design in a cookie cutter plan book.
- Pay the builder as the work is completed. If possible, pay the subcontractors yourself. Otherwise you may fully pay the general contractor and have several liens on your home from unpaid subs. If he pays them directly, get proof of payment.
- Realtors maximize income by shoehorning you into the biggest loan you can qualify for. This will make you "house poor", able to make your payments when all is well, but unable to afford anything else.
- Avoid traditional realtors and their 6% commission and go with a discount broker online. On some sites you can search for your home using satelite images and get more information than the realtor has.
- Adjustable rate mortgages are very dangerous for consumers although banks love them because they make so much money and put all the risk on the buyer.
- Try to borrow for 15 or 20 years to greatly reduce your total interest paid. It will be a higher monthly payment, but less overall.
- Don't assume that buying is better than renting. If you will move in less than 5 years or homes are not significantly appreciating, your home is likely an expense and not an investment at all.
- Most buyers seriously under estimate the costs of taxes, insurance and especially repair. One bad roof, water heater etc. can be very difficult financially.
Tips
- Go to your prospective neighborhood and sit in your car at midnight on Friday or Saturday. If it is too loud for you, then this is not the place for you.
- Be there when your home is inspected, talk to the inspector, and ask for tips.
Related wikiHows
- How to Navigate the Home Building Process
- How to Find a Good Real Estate Agent
- How to Invest in Preconstruction Real Estate
- How to Pay Less Real Estate Commission
Article provided by wikiHow, a collaborative writing project to build the world's largest, highest quality how-to manual. Please edit this article and find author credits at the original wikiHow article on How to Avoid Pitfalls when Building or Buying a Home. All content on wikiHow can be shared under a Creative Commons license.
