5 Real Estate Fears That Keep You From BuyingAmy Fontinelle, provided by
Investopedia November 3, 2010 04:00 AM Copyright Investopedia. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Wednesday, November 3, 2010
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/11/03/investopedia48246.DTL#ixzz14K5wGyReMany people who would like to own homes have fears that prevent them from buying. If you're one of these people, take heart - there are simple steps you can take to overcome your fears and become confident that you will make a sound purchase. Here are some of the top reasons you may be holding off on purchasing a home and how to overcome these hurdles. (For related reading, also check out 5 Mistakes Real Estate Investors Should Avoid.)
IN PICTURES: Financing For First-Time Home buyers
1.A Loss in Property Value
Homes can decline in value, even without a disaster. Neighborhoods can gradually decline, newly-built homes can make older neighborhoods less attractive, or an unpleasant development (prison, landfill, highway, etc.) could be built nearby. A poor or mediocre economy can also keep home values down.
Even savvy home buyers can't always predict what will happen to home prices. But you can take precautions, like buying in a low-crime area where the homes are well-kept, primarily owner-occupied and with high-quality schools nearby. You can buy in an area where there are multiple sources of employment, so if one business shuts down or leaves, the entire town doesn't have to move to find work. And you can contact the city government to ask about future development plans in the area you want to buy.
2.Overwhelming Maintenance Costs
All homes have upkeep costs, and many homes have very large maintenance bills. If you become a homeowner, you won't be able to avoid these costs. However, there are numerous things you can do to mitigate and prepare for them:
◦Buy a home that has been well-maintained.
◦Buy a home that has recently had major components upgraded or replaced (e.g., new roof, new water heater, new plumbing, new electrical)
◦Buy a new home (though new homes sometimes have undiscovered defects).
◦Regularly maintain your home to prevent small problems from becoming major repairs.
Go into the purchase with a generous emergency fund set aside for home maintenance and add to that fund every month.
To avoid buying a money pit, you should also have a home inspection before you buy. (For more on home maintenance, take a look at Do You Need A Home Inspection?)
Are you concerned about buying the wrong house? Maybe it's because you don't know what you want. Fortunately, you can solve that problem.
Make a wish list that includes features your home must have, as well as features that you'd like it to have but aren't necessary. Look at many houses to see what's available in your price range. If you find a home you think you want to buy, sleep on your decision before making an offer. And don't exceed your budget, as you will quickly regret buying any house that strains your finances. Also, don't be afraid to walk away from a house - new homes are always coming on the market.
IN PICTURES: Home Renovations That Don't Pay
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/11/03/investopedia48246.DTL#ixzz14K5cN7lN
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