Top 5 Tips For First-Time House Buyers in Pakistan

Buying house can be a bit spine-tingling for first time buyers, we have 5 best Tips for First-Time Home Buyers

Buying a first house can be a daunting, puzzling and hectic process. Many potential buyers are understandably anxious at the prospect of making the prime purchase of their lives. Rather than plunging in and hoping for the best, you should prepare cautiously before you begin the house exploration.

Following some valuable and beneficial tips will help you turn an overwhelming and nerve-racking experience into a thrilling hunt that returns the right house!

1) Creating a Realistic Price Range

A common mistake among first-time house buyers is purchasing a overpriced house which they think they can afford but it would not happen like that at the end. You should not depend on banks to determine what you can contentedly spend on a new house. Banks are skilled at determining the amount of monthly debt in the form of mortgage, insurance, credit card, compound interest, home loan, student loan and auto loan payments. They have no way of ascertaining, however, what you spend each month on groceries, entertainment, utilities or other expenses.

First, you should make a list of all monthly expenditures, including rent or your current mortgage payment or hiring (in case you are getting it), housing expenses such as taxes, insurance and house maintenance. Whatever is left after monthly expenses is the amount which you can add to your savings for buying new home. Wisely consideration of your budget saves time by weeding out houses that you cannot afford and protects against overspending.

2) Pursuing Pre-approval

In case you are buying home by taking loan, getting pre-approved for a mortgage/loan prevents a deal on a dream house from falling apart due to failure to obtain funding. You should compare and evaluate loans from several lenders to judge which one most effectively fits your needs. A pre-approval letter / document will give you some authority to negotiate and bargain on a house’s price because the seller will consider a pre-approved offer more positively than an offer that is without lender pre-approval.

Keep in mind that pre-approval is quite different from pre-qualification, which is process in which, the lender estimates and assesses what you can afford. Pre-approval is a more involved process in which the lender looks at your credit report and accomplishes an extensive analysis before final approval, its more like a financial background check. At this point, you will get a good knowledge of the mortgage/loan interest rates as well.

3) Setting ‘Needs’ and ‘Wants’ Priorities

You should compile and maintain a list of what you need and want in a house. Needs might include important things like the number of bedrooms, bathrooms, high-quality schools, parks, hospitals, nearby markets having medical stores, restaurants, barbershops and travel time to bus terminals, airports or railway stations etc etc or may be from security point of view. These needs are features of the house that either cannot be changed or cannot be changed without substantial cost to you.

Wants, on the other hand, are something you would like and that can be changed. Wants may include trivial things like changing a hot tub, connection outlets, landscaping, glossy paints colors, cupboards, finished basement or lawn arrangements. Making a list of wants and needs helps you focus on what is really important in a house, narrowing the list of prospective houses. Preferably and ideally, the new house will include all of the needs and a few wants.

4) Choosing the Decent Neighborhood/Nearby Residents

Crime statistics, security, fuel & energy supply (even considering load shedding of electricity and gas regarding current situation in Pakistan), insurance rates, property taxes, medical facility, school quality and traveling time are important considerations for you. But because the neighborhood makes up a large part of a house’s overall value, take your time and make some effort to find exactly what suits your needs. You should also consider job availability as futuristic approach, road traffic during rush hour and closeness to amenities such as shopping Malls, Mosques, Schools and Banks and public transport.

Driving through the neighborhood at various times during the day and night will provide a more complete picture of the location. Don’t forget to talk and pass some time with your potential neighbors, who can provide you good pieces of information regarding the neighborhood, security situation and about other residents in the community. Whether the neighbors are living on rent or permanent residents and what are their or house sellers repute are important factors in determining the real value of house. Take note that bad neighbors can bring down the value of a house.

5) Finding the Right Professional House Inspector

You will also need a professional house inspection from an experienced house examiner which can scrutinize house. Even new houses may present costly problems which can be figured out only by a proper house inspector.

You should talk to several inspectors before hiring or getting his services. You should ask about the scope of the inspection, qualifications of inspector, the procedure he follows and how long it will take and the nature of the report you will receive at the end of the process. You may ask someone in your family who can guide you for this purpose.  Critical areas covered by the inspection should include overall structure and quality of construction, integrity of the foundation, electrical, heating and cooling systems, condition of plumbing or any other technical or manufacturing fault. If the inspection uncovers serious issues / faults, such as cracks / holes in the foundation, or deterioration of woodwork, you may decide to back out of the agreement or ask the seller to repair the damaged part.

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