First time home buyers are often the victims of their own ambition. Buying your first home is a big first step in life and because its such a sizable investment it can quite literally put you ahead or knock you back in life. While most people think they know how to evaluate the value of a property, very few actually do because they lack the financial management skills to evaluate the true value of the investment.
There are 3 very common mistakes that first time home buyer make and these are responsible for some of the worse investment decisions ever made. make sure you stay well clear of these and treat this investment with caution and respect.
- Buying Their Dream Home
One of the biggest mistakes that first time buyers make is to buy their dream home. Although there is nothing wrong with the idea, this usually leads to couples over lending and extending their budget to the very limit. the consequence is that they can hardly make the monthly mortgage payments and having a tough month can really push them into the red financially. This is really dangerous as it puts you on the back foot from day one. Treat it as a stepping stone instead. Buying your first home is about getting unto the property ladder and that’s it. In two or three years time you will be able to actually afford your dream home and buy it quite comfortably.
- Impulse Buying
I’m sorry to say this but women are especially guilty of this. So often the wife will fall in love with a house and want it immediately. Impulse buying is fine when you buy shoes but when you buy a property you need to make a very calculated decision. You need to weigh up all the issues and decide whether its a good investment or not. Impulse buying will almost always cause you to pay too much for something that isn’t really as good as it looks on the surface.
- Listening To Novice Advice
When it comes to any investing you should never lend your ears out. Far too many bad investment decisions is the result of an uncle or a friend or even a real estate agent’s “tip” or “insider advice”. If you have to listen to someone, find real experts that won’t gain financially from your decision and listen to them. Good investments is all about getting good advice – especially if you are not an expert yet.