There is no bigger purchase that private consumers are likely to make than buying a new home. This is why it’s important for buyers to think carefully about every decision they make. The wrong choices at any stage of this process can have long-term and very expensive repercussions. Following are seven of the most costly home buying mistakes Downtown San Diego real estate pros commonly see, along with tips for avoiding them.
1. Letting Your Lender Set Your Budget
The job of a mortgage broker is to tell you how much money you qualify for, not how much you should actually spend. Although lenders will carefully review your earnings, your debt-to-income ratio, and all other pertinent factors, there are some aspects of your financial profile that will not be considered during this review. These include your long-term savings goals, you plans for retirement, and the contributions that you may want to make to a college fund if you ever have children. Rather than basing your budget off of what you qualify for, consider your future and your long-term financial health and then set your budget on your own.
2. Buying Before You’re Ready
It’s important for buyers to be both emotionally and financially ready for this purchase. This means having a sufficient down payment, a strong sense of financial security, and the willingness and ability to commit to the many responsibilities that property ownership will entail. Take some time to think about why you’re buying and make sure that this decision isn’t solely motivated by emotion.
3. Making Bids That Waive Home Inspection Contingencies
In markets with high demand, like Downtown San Diego, you may feel driven to submit a competitive bid that waives the inspection and makes your offer more appealing. This is a mistake that can have long-term consequences. If major structural or other problems exist, these are issues that won’t be reflected in the sales price and that will have to paid for out of your own pocket.
4. Taking on Too Many DIY Projects
Finding a “fixer-upper” that fits your budget can be exciting, but it’s important to maintain a realistic outlook in terms of what you can change and what you cannot. If you want to knock down walls or take on an entire kitchen remodel, it probably isn’t the right place for you.
5. Failing to Research the Neighborhood
Location is everything in real estate simply because it is the single factor that buyers cannot change. You can remodel and redecorate your condo or loft as many times as you want, but you’ll never be able to relocate it. Although Downtown is often thought of as one large neighborhood, the smaller communities within, like Little Italy, Marina District, Gaslamp, and East Village each have very different personalities, so to speak. Take some time to walk around your neighborhood of choice, check out local entertainment options, and note things like available parking or late night noise. If you don’t work in Downtown, you should even time your morning and evening commute in rush hour traffic. These are all things that will determine whether or not you’re actually happy in your new location.
6. Overlooking the Need for a Good Exit Strategy
One of the most common mistakes among new homebuyers is failing to plan for the future and create a solid exit strategy. A condo, loft, or even penthouse that works well today could be far too small several years from now. This can be problematic if you attempt to sell your property during a sudden increase in supply. Consider the possibility of significant changes in family size and look for a property that is flexible enough to support your growth for an extended amount of time so that you aren’t forced to drop your price in order to make a hasty exit.
7. Miscalculating Your Ownership Expenses
Although buying a new place is likely the biggest investment you’ll ever make, it is still comparable to other purchases. Think about the last time you bought a new computer. In addition to the actual hardware, you needed a basic software package, solid security, and a range of accessories for enhancing the unit. Without these things, your new system would be vulnerable and far less effective. You have to think about the range of expenses that buying, moving into and maintaining your condo is likely to entail. Write each of these down and make sure that the total costs of ownership are something that you can actually manage. This is critical for your long-term success as a property owner.
You’ve chosen a great location with Downtown San Diego, but don’t forget other added expenses like parking or a separate storage unit, which aren’t always included in the cost of Downtown San Diego condos for sale. For more information on buying a new place or to schedule an appointment with an experienced agent, call 92101 Urban Living at (619) 649-0368.