Maybe you’re buying a property that you plan to live in for a long time. Perhaps you’re just buying a home as an investment. Whatever the case, you need to stay protected and in control during this process.
Buying a property isn’t a breeze, even if you have all the money you need upfront. There are so many ways in which this process can go wrong, so not going in without the means to protect yourself and your investment is a mistake. Here are the best ways in which you can protect your own interests when purchasing a property.
Learn as much as you can about your financial options
So many home buyers make the mistake of assuming that going to their bank and taking whatever mortgage offer is available to them there is the best or even only way of doing this. But you have so many options when it comes to financing options. Of course, the key to protecting yourself here isn’t just to know that there are other options out there for you, but to actually know what the implications of all of them are.
Something you should definitely become familiar with is the Federal Housing Administration. The lenders offering to help you out with the mortgage may not be setting you up with a very good deal. But you may be able to get some better assistance from the FHA in the form of one of their down payment assistance programs. Not everyone will be eligible for these, of course, but exploring this option could help save you thousands of dollars. It can also help you protect your credit score.
Get to know the important terms
Some of the jargon connected to real estate law can get pretty baffling. And when agents and lawyers and buyers start discussing things, you want to be able to follow the conversation, right? After all, what better way to screw someone out of a good deal than to flood them with impressive-sounding terms until they assume you know what’s best and just leave everything to you?
So get to know some of the important terms. “Subject to buyer’s attorney’s approval” is a common one. Assumable mortgage, closing costs, escrow, depreciation, prepayment penalties… all of these things could come into play during this process, and it’s best that you don’t end up getting lost when they do. Consider checking out a helpful glossary of real estate law terms.
Need assistance? Get it
A lot of home buyers make the mistake of putting too much trust in the real estate agent selling the house. You may think you already know this well enough, but we’re going to be more specific about who the real estate agent is actually working for. In most cases, people will be talking directly to the agent who is working for the seller. In this case, they are not someone who is particularly interested in getting the best deal for you. They’re looking for the sweet spot between the best deal for their client and the best deal for themselves, i.e. the most commission they can squeeze out of the deal. You may want to consider hiring your own agent when buying a home, as they will actually work to get you the best deal. (Some would go as far as to be their own agent!)
You also need to think seriously about legal assistance. There are going to be a bunch of legal complexities involved in this process, especially when it comes to the transfer of ownership. A lot of people make the mistake of thinking that this transfer is actually incredibly simple and almost automatic. But it’s actually an involved legal process. You may want to look into first time buyer conveyancing costs.
Work with independent inspectors
Following on somewhat from the assistance theme, it’s important that you get a few more professionals who are going to be in your corner. Again, there are going to be a lot of people in this scenario that are looking to get the most money out of you for as little as possible. This means that you risk purchasing something that isn’t worth what you’re paying for it.
It’s not just about working with your own real estate agent. It’s also about getting the property inspected professionally by someone “on your side.” I don’t want to sound paranoid, but you can’t always trust the reports that you get from the buyer’s side. A lot of us have ended up in a property with a bunch of problems that weren’t highlighted to us. So ensure that you get an independent home inspector. You may even want to get an independent valuation to ensure you’re going to pay a fair price.
