1. Poor financial planning

Homeownership does not come cheap so you need to plan your finances accordingly. Most first-time homeowners underestimate the costs they will incur. There are additional costs that amount to almost ten percent the value of the house that you will need to take into account in the planning stage. Additional charges you will need to plan for include: stamp duty, which ranges between two to four percent of the value of the house depending on its location; loan
appraisal, which is about one percent; and the remaining five percent to be spent on insurance and legal fees. If possible, meet with a lender to get pre-approved for a loan. This will guide you through the house hunting process and in managing your expectations for your
ideal house.

2. Not considering the resale value

As a first-time homeowner, your first house is more often than not your dream house. You have to keep the option of reselling in mind when purchasing the property. The property is also a long-term investment so you need to consider the potential return on investment over the coming years. On location, consider the position of the block and proximity to encumbrances such as railroad tracks or highways. Most people like to avoid living on major roads, and don’t like the “noise pollution” caused by highway traffic or schools, factories and airports.

3. Not conducting a home inspection

An inspection is essential for every house purchase. It will help you to know the repairs that need to be carried out in your house. You will need to hire a professional home inspector to conduct this for you. The home inspection should cover the structural features of the house – including the electrical system, plumbing, pest and mold infestation – as well as the general condition of the house. This will ensure you get value for money while avoiding incurring the cost of repairs that the seller should be liable for.

4. Not having agreements on paper

The rule of thumb is that all real estate agreements should be on paper. This is the only binding document of the sale. The seller may back out of the sale after the offer has been made or not meet to the expectations that you had set together. It is highly advisable that
every agreement made between the seller and buyer should be on paper as verbal agreements are not legally binding. A checklist may be void of details and may not provide all of the information and engineering advice first time home buyers need.