They say that the two most stressful times in someone lives are getting married and purchasing a home. Both activities should be things that are great milestones and should be celebrated but are things that can impact people’s emotions. There are many things that you can do to try and alleviate some of the stress of purchasing a new property and planning is the key. Despite this, no matter how much you plan and try to alleviate the risks of something going wrong, there is always this potential. We have listed some of the things that we think should be considered when going on this journey.
It is common for people, that the biggest purchase they will ever make in their lives is the property. There are not much more things in life that would cost more. As a result of this, the execution of this should not be rushed and it should be thought through – not only from an affordability point of view, but also the return for investment. All around the globe, property prices are very different and in some countries, you will find that people really struggle to get that first time home and may need to beg or borrow money from friends or family in order to get a basic deposit for them then to get lending from a bank or similar company.
What is advertised as the property cost is not necessarily what you should pay for this. Negotiation play a crucial part in this exercise. This can be tough for a potential buyer to grasp as if they really want a property, they may increase their offer to make sure that they get what they want and that no-one else jumps in and puts in another offer to outbid them. The biggest tip on this is to remain calm as the seller could “bluff” and give false indicators that there are lots of potential buyers that then make people increase their bidding amounts. If you are using a property purchasing company, then there are different ways that they can discretely find out the number of people who are interested and the potential competition.
In addition to the price, there are things that can be done around the negotiations. This can include things such as furnishing and added extras. If the seller is not willing to move on the actual sales price for whatever reason, then have a think outside the box and see if there is anything else you can get flung into the mix in order to make the sale more attractive.
A massive bugbear on people is that they are unable to park their motor vehicle on or near their home. The last thing that someone wants is to be out working hard all day and when they return to their home, they are unable to find a parking place for their car. This can be particularly stressful if there are items (such as shopping) to be carried to the home. There are a number of things to take into consideration in this respect:
- Parking Permits – In some areas, there are parking permits in place where people can pay extra in order to have a specific space. The costs of this should be investigated in advance as depending on where this is, this can be quite costly. Also take into your thoughts the number of actual spaces available but also the costs for a temporary permit if you have a visitor coming that needs a space.
- Off road Parking – Ideally, most people like to have off-road parking for their home, so they are guaranteed to have their own personal space when they drive home. If this is not something that currently exists, then it may be something that you look to construct yourself if the space permits. Building a robust driveway is not an expensive task and something that can be done quite easily and quickly. Before embarking off on this adventure, be sure to check if any type of planning permission or similar is required from the authorities.
Using energy in your home is probably one of the most expensive monthly outgoing costs that should be taken into consideration in advance. If purchasing the property, you should have a look at what the normal rates are for this and search online on comparison sites to see if a better deal can be found. You may wish to even consider solar panel to be installed on your home. The best solar company in Ontario are experts in this where they complete the whole project from start to finish, giving you the costing for the initial outgoing installation but also what the estimated costs will be moving forward (savings). Ontario best solar power companies are ones that are not just interested in the one-time installation but give you peace of mind in terms of maintenance and upkeep. It is becoming far more common in these types of places where there is a lot of sunshine for solar panels to be far more common as people are not only looking to save some cash, but they are aware of their global footprint and effects of global warming. If constructing a new home, then this is an opportunity to get this completed in advance. Check out the local government incentives around this as some authorities are offering homeowners some discounts and one-off payments in order to get these installed. Why not check this out and see if they are available in your area.
There are other things to consider in this respect which can include the windows and doors that are in the home (or to be installed) to make sure that they are capable to keep the heat in. There have been significant advances on this in the last few decades where double glazed doors and windows are standard practices.
You may well construct or purchase a dream home, however, if the area or neighbours are not positive then this could end up being a nightmare of a decision. The internet is a powerful source of information where you can find out loads of different information. This can include the performance of the local schools, the crime rate, the waiting lists for health services and what local events and activities are available. If you are not fully aware of the area, then it would be highly recommended to do this sort of basic research in advance. This can include maybe actually speaking to some of the neighbours in advance or going to the shops and restaurants and asking some of the local resident’s questions about the area.
If you have the right level of deposit behind you, then there are going to be a large list of lenders looking to give you the funds to build or move into a new home. Getting acceptance for this sort of lending is not as difficult as many people perceive and even if you are rejected, there are other options to still get the money which could include a family member or friend being signed as guarantor. This would mean if you fail on the payments for any reason, this signed person is the person accountable to pay any arrears (or at least make sure it is paid). Lenders will do a search of your credit history to make sure you haven’t been in trouble in the past. If you have then it is important to declare it as if you don’t and it shows up in your report. The worst you can do is refrain from telling them about it as they will find out and most likely then refuse to lend to you as they will wonder what else it is you are hiding from them. It is important to shop around at this stage and look at your options compared to the position of the economy. Some lenders will offer fixed lending rates, but others will give flexible lending rates that change – make sure you understand all of this and have it all incorporated into the affordability.
Generally, for properties, you can take lending out over a large number of years which may be good to keep the payment terms low, however, the consequence of this is that the longer you take out the loan / mortgage, the higher the interest payments are back to the lending company. It is important that you understand that and try to strike the right balance. Ultimately, you do not want to leave yourself short so that you may struggle to pay back the monthly payments but on the same account, you want to keep the interest rates to as low as you possibly can. Taking advice from an accountant at this stage may be a good idea. It may only cost a few hundred dollars to get this advice but long term it could pay off.
Get a Structural Report
If you are purchasing, then it is key to get a structural report of the property so that you get an independent view of any issues or arising issues. This could include things like roof damage or potential damp spots. When you make a visit to a property, not all is visible and as such you may already think you have seen everything but there will be a lot of things that are visible to the eye. When getting this sort of report, there are many different companies that will offer the service. Do not just go for the cheapest, make sure that the tests and report that they provide is really thorough to give you a good level of confidence that the property is in sound condition.
A massive blind spot for people who build or purchase a new property is to get good home insurance. You will find the vast majority of people have home insurance of some type but how effective is it? Make sure that you search for different companies (the web is a good place to start) and that you understand what is covered in the policy and what is not. It is a good idea to make sure that there is “Hazard” cover incorporated into these policies for things such as extreme flooding, earthquakes etc. Some of these are referred to as “Acts of God”. Getting this included on your insurance policy may cost an extra few dollars a month but the consequence of not having this on the policy could be catastrophic as if your house goes down for one of these reasons and you don’t have the cover, you wouldn’t get any payout.
Monthly payments for insurance will clearly be based around the level of detail that you want your home covered but also the excess (or deductibles as sometimes referred to) will change your policy payment sum. As an example, if you choose to have a deductible of $1,000, this will mean that if you are claiming damage or similar from your policy for the amount of $5,000, $1,000 will be deducted first, paying you out a total of $4,000. The higher the deductible amount the lower the premium will be. You can get even normally get the deductible amount down to zero with some companies but will mean your monthly/annual policy amount will be higher.
When the home insurance is finished on the first year, do not necessarily renew with the same insurance company as it is likely they will put the premium up slightly (as they know customers will not want the hassle of trying to switch). This is a ploy by a lot of insurance companies so please be aware of this and do not get caught out. Sometimes even making a phone call to their renewal team will make them reduce the policy amount offered.
Make sure to consider these things when constructing or purchasing a home in the future.