Friday, 14 October 2011

Don't make these mistakes buying a house

You've found the perfect home, there is consensus between you and the seller and all seems to be said and done. Not quite! Don't let your guard down until the very last moment and avoid the following mistakes:

Destroying your credibility

The fact that your credit record is in tip top shape does not mean that now is the time to buy everything in sight! You may feel that a few designer handbags and the like is part and parcel of the new house but your lender is likely to disagree. The loan is granted on the grounds of the balance between your income and debt and even cash reserves are taken into account. Excessive spending may cost you your bond so wait until actually closing the deal before you hit the shops. If you want to change your job, postpone, as lenders prefer a secure job history.

Trusting every Tom, Dick & Harry

If you are dealing with a for sale by owner seller, be careful about paying the deposit directly into his bank account. Many sellers don't quite grasp the fact that the money is only theirs for the taking once the sale is a done deal. Even if they do understand this, don't burden them with the temptation of forgetting!

Mismanagement of funds can mean that a buyer has to fight hand and nail for money that he is perfectly entitled to. Deposit the money into the Trust account of an attorney or estate agent.

"A written agreement helps to prevent misunderstandings and puts you in a more secure position overall."

Unless otherwise agreed, the interest is paid to you after registration of transfer. On your written authority, both your estate agent and conveyancer can arrange for it to be invested in an interest-bearing account, and will act in your interests by placing it in the best short-term investment available.

Getting personal

Don't allow your emotions to cloud your judgement. Be reasonable about taking care of a few repairs yourself and don't upset the seller. It is understandable that you are keen to make the house your own, but don't sound too exited about ripping out a few trees, slamming down the main bedroom wall and cultivating lettuce where his children's Wendy house is standing. The seller is probably a little sentimental about the old place and may become stubborn and difficult to negotiate with if you don't show it the necessary respect.

Forgetting the obvious

Remember to apply for utility services at your new home. The power, water and telephone lines won't connect themselves! In the same breath, don't forget to disconnect services at your previous home. This sounds blatantly obvious but easily gets lost in the myriad of details that have to be taken care of around the time you are moving.

Getting your new home adequately insured seems just as obvious but buyers often forget this and have to scramble to get it done at the last moment. It is not only important in terms of the damage that you could suffer but also because your lender will require it. Negligence could unnecessarily delay the transaction.

Neglecting to get all agreements in writing

Be careful! A contract for the sale of immovable property is not legally valid unless it has been put in writing and signed by both parties. The contract must contain a few prescribed essentials and has legal implications that you didn't necessarily agree upon outright with the seller. Find out what these are and if you want to exclude their working contractually do so in writing and in no uncertain terms. A written agreement helps to prevent misunderstandings and puts you in a more secure position overall. Be sure to read any documents that you sign very carefully.

Checking Completed Repairs

Make sure that the seller did in fact make the repairs agreed upon. If possible ask a home inspector to verify that the problems have been dealt with satisfactorily. This investigation does not replace your final walk-through on buying day.

Taking Your Final Walk-Through

Do a final walk-through before the deed changes hands. This is not an inspection of the house. All you want to verify is that the house that is being delivered is the same one that you contracted for. Damage might have occurred during the seller's move and appliances that worked when you contracted may have broken in the interim. Did the seller leave the items he agreed to leave and take those he is obliged to take? You are in a better position to negotiate and receive compensation if you voice your disapproval sooner rather than later. Ask your estate agent or attorney how to proceed. Don't make the common mistake when buying a home.