How to avoid risks when buying a home or condo
Have you finally decided that it is time you owned a home? If you have, you are probably expecting that the entire exercise of buying the house to go as planned. Like you, more people today are also trying to own a home. With the US real estate industry experiencing a positive growth, many people are taking this opportunity to buy their dream homes.
To ensure the process of home ownership is easy, highly reputable realtors like Penticton real estate specialist Gil Szabo are working hard to help prospective homeowners navigate the process of buying a home by giving them access to a diverse inventory of homes for sale.
What are the risks involved in buying a home or condo?
Some of the risks you are likely to face when buying a home are:
- Home ownership is less flexible
The first risk that comes with home ownership is less flexibility for you. If you buy a home, you are likely to be tied down to living in a specific area, especially due to the huge financial investments that come with purchasing a home. If you want to move to another town or neighborhood due to work or family related reasons, it will be more costly for you to move if you own a home.
- You risk losing your money
Buying a home requires financial commitment. As such, you should be aware that in the process, you could lose your money within a short time. Homes can depreciate in value on a short-term basis, and thus reducing the amount of money you can get if you are to sell it.
- Increased monthly spending
Before you buy a home or condo, you should remember that there is a likelihood of increased monthly spending. If you buy a home there are expenses you will have to incur on a monthly basis such as commuting costs if your home is far away from your place of work. Additionally, you will have to incur more heating and cooling expenses if you buy a house more spacious than where you lived. You should be prepared for the extra bills and make plans on how to offset them.
- There is the risk of going bankrupt or foreclosure
If you are planning to buy a home through a mortgage, you need to note that non-payment exposes you to the risk of repossession. This will have financial and social implications on your family. Since a home is an expensive investment, you might even go bankrupt if your home is repossessed.
4 Ways you can avoid the risks involved in buying a home or condo
If you are buying a home or condo, it is important for you to avoid the mistakes that some homeowners make:
- Ensure that you know the real cost of the home you want to buy
To avoid paying more for the home you want to buy, ensure that you know the right market value of the property you want to purchase. You can get the right value by engaging a reputable real estate company to inspect and value the house before you buy it. Valuation is vital since it will help you make an informed decision of whether you are getting value for your hard-earned money or the seller is overpricing his or her property.
- Determine your long-term plans
Before you buy a condo or home, it is essential that you consider your long-term goals. For starters, you need to establish if you want to live in the neighborhood on the long-term or short-term basis. If you are on a permanent job, determine the nature of your work and consider the possibilities that you could get a transfer to a different state. If there is a likelihood that you will move in the short-term, you should consider renting a home rather than buying it.
- You should consider your goal for buying a home
Although many people buy homes for their families, some are business persons and want to make profits by buying and reselling condos. If you are in the business of buying homes, you can buy a home in areas that you expect the prices will increase in the near future and sell them once the prices go up in order to make a profit. If you want to buy a family home, ensure that you choose the right home and locations that suit you on the long run.
- Consider taking a home insurance policy
If you want to buy a home, you should consider taking a home insurance policy to protect yourself from future financial constraints. A home insurance policy can help you repay your mortgage if you lose your job or source of income and ensure that you do not go bankrupt. It can also prevent your home from being repossessed by the financier.