Mistakes to avoid when purchasing a home
Published: Sep 26, 2013
So, after much deliberation, you decided to sell your home for a number of reasons; you’ve outgrown it and need more space, or your economic situation has improved, so that you are now able to buy that townhouse in a gated community.
The problem now is that you need to sell your home to make this move. You have already started to shop around, but you are unable to commit to a purchase as yours is still on the market.
One thing to keep in mind is that if you are depending on the proceeds from the sale of your home to purchase the new one, your best bet is definitely to wait until you have a sale and it closes.
Otherwise, disaster could strike, and if you prematurely put down a deposit before your home sale, if that sale falls through, you will likely lose your deposit and be out of thousands of dollars!
Another classic mistake is not taking into account all of your closing costs, such as the government stamp tax which can be quite hefty, especially if you are not able to qualify as a first time home buyer. Additionally, legal fees can serve to add another chunk in closing costs. Aside from those factors it is good to know the difference in the net and gross price.
For instance, if the seller is selling his home for a net price of $350,000 that is the amount of money he wants in his hand. That means you, as the buyer, are responsible for all the closing costs of the seller, and you pay both sides of the government stamp tax and the seller’s legal fees and as well as your own, so be very careful before signing on the dotted line and placing a deposit down. Ignorance will cost you dearly!
On the other hand, the gross price means, for example, if the owner list her home for $300,000 gross, that means that the seller will pay the real estate commission, half the stamp tax and their own legal fees. The buyer pays half stamp tax, and their own legal fees, on top of the $300,000.
I should also point out: when you are shopping around, keep a close eye on the area you may want to reside in taking into account whether the area is congested with traffic noise from vehicles or heavy machinery. Will your kids be safe playing and riding in the streets, are there crosswalks or parks? Those little things may be what draw you to purchase in a particular community.
Lastly and perhaps most importantly, find out who your next door neighbors would likely be. Don't be afraid to ask others as your life can be heavily impacted by having neighbors from hell living next door, with loud music, dangerous dogs and those that don’t maintain their property.
Take your time as you are about to make one of the biggest investments for you and your family. These are big decisions and when in doubt, we have no problem guiding you along the right path.
• William Wong is president of Wong and Associates Realty. He was also a two-term president of The Bahamas Chamber of Commerce and The Bahamas Real Estate Association. Questions or comments can be emailed to William@wongsrealty.com.