Buying your first home can be unnerving and exciting at the same time. You may worry about your ability to meet the long-term financial commitment. Yet, you know that getting on the property ladder avoids you wasting thousands in rent each year.
Once you have found the property you wish to buy, you need to put the excitement to one side for a moment. You need to put your business head on and act like a pessimist, not an optimist.
Closing on a home is full of potential pitfalls
Here are five things you need to consider when closing on a home:
- Ensure you have a contingency plan: Before you sign anything, have an attorney check the paperwork. Surprises can crop up. Include contingency clauses.These allow you to back out of the deal in specific circumstances
- Ensure you can afford the property: Be wary of overstretching yourself. It increases the risk you could lose your home in the future. Double-check the mortgage offer and make sure you understand the conditions.
- Ensure the property has a clean title: If the property’s price seems too good to be true, it probably is. What appears to be a bargain may have ownership problems. A thorough title check is essential.
- Ensure you know what you are buying: Buying a home that needs a lot of work is fine if you know beforehand. Ensure you have the necessary surveys done to gain an accurate picture.
- Ensure the property is insurable: If you cannot get insurance for your home, you may struggle to get the loan to buy it. Even if you do, you are risking a lot. When insurers refuse to cover a property, there is usually a valid reason.
It is easy to make mistakes when closing on real estate for the first time. If the seller realizes you lack experience, they may try to take advantage. Ensure you have experienced legal support to guide you through the process.