You may receive advice from family members, friends, and sometimes even real estate agents when buying or selling a house.
While some advice can be good, Limestone Management warns that you can also hear a lot of bad advice.
Below, we’ve compiled the seven worst pieces of advice you’ll probably ever hear and why they’re so wrong.
Advice #1: Renovate Your Newly Acquired Home Before Moving In
You might hear people tell you to renovate before moving in. People will tell you that you can renovate as early as possible to avoid all the construction mess.
It is good advice if you are renovating your house to address functional or structural issues.
The only exception would be if the renovation were purely cosmetic. It may be a good idea to delay renovations.
Do not do any renovation just for the sake of looking good. Live in the house before deciding to do the remodel. Try to get an overall sense of the home before deciding whether it truly needs to be renovated. Get an understanding of how you wish to live in the house.
It might be that the renovation you planned is not necessary and you can save money that way. However, you should renovate your home according to your needs.
Advice #2: Renovating a House Always Increases Its Value
This is the kind of advice you will likely hear from your family and friends when selling a property.
They’ll tell you that you should renovate and improve your house to make it more valuable. It might seem like a good idea, but it’s not because of several reasons.
Renovating a house will cost a lot. It will also take time to finish. And by the time you are done with your major renovation project, the market could have changed.
What Makes Renovating Before Selling Such a Bad Idea?
Market conditions can be unpredictable when you decide to sell. Rising interest rates will reduce buyer demand and lower buyers’ borrowing power. Sure buyers only seek fixer-uppers because they are cash-strapped and can’t borrow money. Thus, renovating prevents them from affording your premium renovation.
There may be so much demand for houses that fixer-uppers will sell at a similar price to renovated apartments due to the low inventory.
You can also never be sure that your buyer will share your style preferences.
Advice #3: Purchase Properties With Negative Appreciation and High Growth Potential
You should not invest in negatively appreciated properties with very high growth. Typically, a negatively appreciated property generates less cash flow than it takes in. So an asset that loses money shouldn’t be invested, right?
Let’s say you purchase a tenanted property in a high-growth community. Now the property might get you some positive cash flow after paying for maintenance, taxes, and mortgage payments.
But what if the tenant decides to leave?
If you can’t find a tenant soon, you might end up paying a lot of money out of your pocket just to keep the property.
Purchasing a negatively appreciated property is like gambling your money.
Buy a property that is more sustainable instead of these types of properties. Sustainable properties may not provide a considerable income, but they can give you a steady cash flow.
Advice #4: You Can Save Money by Not Having the Home Inspected
This is another piece of advice that you should never follow. Some people will say that you should skip home inspections to save you money.
If the house seems perfect to you, don’t let the urge to waive the home inspection discourage you.
A licensed inspector can provide the buyer with information on issues that are not visible to the naked eye. For example, the most expensive repairs often involve the foundation and groundwork of the property.
By skipping the home inspection, the buyer has lost all the rights essentially to ask for additional repairs not covered in the original contract. Furthermore, if other issues are found in the future, you will often have to pay out of pocket, leaving you in a bind.
When such a significant, lifelong investment is involved, one should never take shortcuts. There are simply too many risks in comparison to the potential rewards.
Advice #5: Avoid Buying a Property Now. The Real Estate Market Is About to Crash
This is one of the worst pieces of advice you could ever receive.
The prices of real estate fluctuate. They can go up or down at any moment. However, you must also remember that inflation constantly rises. As a result, your money’s value decreases every year. Waiting too long will weaken your buying power.
Real estate is a long-term investment. Considering the long-term gain, you will surely earn a profit.
As your money becomes weaker, you may have a more challenging time buying a good piece of property.
Advice #6: Lowball Your Offer at All Times
Another bad piece of advice you’ll get is to lowball a seller.
Lowballing an offer could mean losing a great deal as a buyer. The majority of buyers will always want a good bargain.
A downright insulting offer can often result in the deal being terminated even though it is understandable for you to want the best value for your money.
Unfortunately, A lowball offer may harm your chances of closing the deal. In addition, this may lead the seller to believe that you are not serious about purchasing the property.
It could end up costing you more at worst. This could result in you losing out on the opportunity to acquire a great property.
When asking for a lower price, make a competitive offer.
Advice #7: Buy Directly From the Seller Instead of Using a Buyer’s Agent
You will hear some people tell you not to get a buyer’s agent but rather bargain directly with the seller.
But usually, this ends up being a costly mistake. Following this advice could result in you spending more money.
What is a Buyer’s Agent?
Buyers’ agents work on your behalf, representing you in the real estate transaction. It is the buyer’s agent’s job to make sure your housing needs are met.
A buyer’s agent can help you with a lot of things. As an example, they can:
- Calculate the fair market value of a property.
- Make your deal better by negotiating.
- Assist in finding a property within your budget.
- Provide you with a property in a suitable location.
- Possibly recommend other professionals who can help you, like a home inspector or a mortgage lender.
You can find helpful agents in real estate websites in the Philippines. Whether you are looking for a house and lot for sale in Taguig City or a condominium, they can give you a great list of options. Experienced buyer’s agents save you time and money and can help you in the purchase process. You can also save time when it comes to paperwork with their help.
Buyer’s agents are there to represent your interests. Consider getting one if you plan to buy a home.