No matter how well prepared you think you are for, parenting still has a special way of kicking you in the family jewels. But, with all that goes on in the world today, the best you can hope for is that you have prepared your children for adulthood as much as possible and that you are still around to give them life lessons.
As a real estate expert, the best thing I could do for my daughter was to teach her how to make smart choices when buying her first home. I tried the best I could and when all is said and done, I think she turned out all right. Here are the top 3 lessons my daughter learned buying her first home (from me, no less!)
Be a bit more thorough and specific when it comes to the costs of owning a home
The thought of buying your first home can be glamorous. You will, no doubt, have fantasies of owning a posh villa in Chelsea and maybe another apartment in London, you know, for those wild nights out in the city. If you have the money for it (as in, you belong to the top 1%) then sure, you can do all that and more. But if you belong to the rest of the population, then budgeting is a huge part of owning a home.
Before you go off and buy a villa in some expensive neighbourhood, sit down and carry out a thorough calculation of all the money you will need to own that home. We are talking:
- Home association fees.
- Daily expenses for running the house.
- Funds for regulation compliance expenses.
The list of expenses can go on and on depending on the kind of family/lifestyle you lead. Once this list is complete, have a candid conversation with yourself appertaining to whether or not you can afford that particular house.
Put down a bigger down payment
If you do decide that you can afford the house, the next step is to figure out how you are going to pay for it. The best advice you could ever get from a veteran real estate expert like myself is this: put down a bigger deposit.
Having a bigger down payment for your home means that you have a smaller amount of debt on your mortgage and that you have more money left over at the end of each month once you have made the mortgage payments. It also means that you have more equity in the house and that you will fully own it sooner rather than later. Take the time to save as much as you can to have a bigger down payment for your dream house.
If a 20% or higher deposit seems a little too far out of reach, perhaps you may enquire of the seller is open to terms. That is, find out if the seller is willing to take a monthly payment for the deposit in a span of one to two years. In that way, it makes it easier to make a larger down payment.
This type of flexible arrangement have been popularised by investors like Rick Otton and Reena Malra.
Use a solicitor
There is no way around this; it doesn’t matter if you are buying the house from your very own father. You simply must use a solicitor to ensure that the entire process is legal, documented by the relevant authorities and that it is in keeping with any regulations set forth by the prevailing rule or law. It is that simple. Spending thousands of pounds on something that might not be recognised by the Government or something that could backfire on you later is just not wise.
Of course, she learned a few more lessons including things like:
- Always have the house inspected before paying for it.
- Use an estate agent if you want to find better deals.
- Get pre-approved before shopping for a house.
- Get home insurance.
These are life lessons that every first-time homeowner can benefit from no matter where they come from in the world.Tags: buying a first house, first homebuyer mistakes, tips when buying a first home