Mistakes Made When Buying A House
A home is a place of residence or refuge and comfort. It is usually a place where an individual or usually a family can rest and relax, communicate, share, feast and be able to collect and store their personal properties.
Therefore it is important that when you consider a place to call your home, it must be a safe and pleasant place to be in.
Buying a house is more often than not, the single largest investment most people ever make; yet all too often it’s a decision made in rush without adequate thought and preparation.
In this article we will explore some of the house-buying mistakes to watch out for in your property hunt.
1. Solo Mission
Buying a house is a complex transaction and should not be undertaken alone.
You need to enlist the help of these individuals early in the buying process : Real Estate Agent, Banker, Lawyer and Property Inspector.
It is also wise to get referrals and advise or tips from family and friends.
When assembling your team, select rightly. Lack of experience in the person who’s suppose to be your guide can make your property hunt a frustrating experience.
2. Love At First Sight
You may be in love with the house at first sight, but you have to ask yourself if the house fit your family’s needs and budget.
You have to make sure that you make a list of your needs and wants and also check whether the house fits your requirements.
Besides that, you should check out the neighbourhood and the communities before you buy by visiting at different times of the day and week.
Even if you do not have kids, you should also check out the local schools to make sure your resale value will be good.
Get past the love at first sight to consider what it’d really be like to live there.
3. Pre-qualified and Pre-approved Financing
Being pre-qualified gives you a general idea of how much you can afford to borrow.
It is a good idea to get in touch with your banker or mortgage officer early in the buying process so that you are aware of the amount you can borrow as this will determine your budget for the home.
The mortgage officers will also be in a position to advise you on aspects of financing i.e. the possibility of having joint borrowers to strengthen the application or to lengthen loan tenures should a need arise.
Being pre-approved means your banker has verified your information and credit rating and agreed to provide you with a specific amount of money.
You are in a better position to go house hunting knowing exactly how much you can afford and that you have the financing ready.
4. Over-Buying
You may qualify to borrow more, but you have to ask yourself again whether you can afford it or not.
Borrowing more would mean higher monthly loan commitments for just the purchase of the house. You have not considered the cost of improvements on the house i.e. renovations and furnishings.
What you need to do is analyze your monthly costs – food, transportation, entertainment, car loans and other commitments. Therefore you have to be sure to budget enough to cover closing costs (often two to five percent of the purchase price), plus moving and maintenance.
Beyond mortgage payments, there’ll be costs like insurance. You don’t want your house to deprive you of your lifestyle.
5. Misplacing your trust
Remember that buying a house is a business transaction.
Your decision is binding.
You should do your own research and know your support team’s roles and responsibilities and not just depending on what one says 100%.
6. Verbal Agreement
Get it right and get it in writing.
Written agreements almost always trump verbal ones when it comes to contracts.
Don’t set yourself up for surprises when you move into that new house and some of the items in it are now missing.
There are many details that make up the purchase contract that governs the particulars of your house purchase.
It is not unusual for an item to be missed; especially those requests made by you of the seller or seller’s agent. If you ask for a toilet to be repaired or a chipped tile to be repaired, don’t simply take someone’s word that the item will be repaired prior to transfer of the property. Make sure every item that you agree on is put in the purchase contract.
Verbal agreements are hard to prove and even harder to enforce. They can lead to an ugly “he said, she said” situation.
Once the property transfers to your name; problems or issues that you thought were going to be repaired are now your responsibility. Don’t let miscommunication or failed promises ruin the purchase of your dream home.
Get all commitments – no matter how small – in writing.
7. Fine print
You need to understand what you’re signing.
As soon as possible, review the documents you’ll be signing. You must always ask for documents in advance, make time to read them and ask questions, where necessary.
Don’t just skim through the purchase contract. Real estate contracts are long and dense, but you need to know what you’re committing to.
Wrong assumptions, poorly written or missing clauses, and not understanding how the clauses affect the purchase can lead to increased costs or a void contract.
Do not sign documents in a hurry. Do not rush the closing.
8. Resale
You should avoid buying a home that costs much more than neighbouring homes and think before buying the most expensive house in the area.
Your neighbours’ lower house values will weaken yours.
Remember, markets change.
If you buy intending to flip your investment and the market falls and you have to sell, your selling price may not be enough to even cover your mortgage.
9. Wrong Price
Many home-buyers forget that the market value of a house is affected a great deal by its neighbours.
The best way to gauge a fair offer price is to get your real estate agent to pull prices that comparable homes nearby recently fetched. The listings will show not just the amounts but how long the house has been on the market and its condition and size.
Note that the nearby houses will affect your house’s value. That means the most expensive house on the street may be pulled down in value by its cheaper neighbours, while a low-end one will benefit from posher surroundings.
10. Conditional Offer
It is good practice to have your offer to purchase the house conditional upon securing financing.
The last thing you want happen to you is the forfeiture of your deposits for backing out on a purchase transaction because of it.
One thing is being pre-approved, the other is the property itself.
The banks will do a valuation on the property to confirm the market value and then to determine the margin of loan they are willing to offer you. There may be other conditions are well that you might want to add in at this point.
11. House Inspection
It is well worth your money engaging a House Inspector to check out the house before committing to the purchase.
These Inspectors know what to look out for and can advise you accordingly on the state of the house, whether it is in need of repairs so that you are fully aware of the additional expenses needed.
Don’t take the word of the seller that certain repairs and maintenance has been made to the home. A formal inspection of wiring, plumbing, and general structure of the home is needed to avoid nasty surprises.
Inspection reports are great negotiating tools when it comes to asking the seller to make repairs.
If a professional home inspector cites specific repairs in the inspection report the seller is more likely to agree to them than if you simply try to negotiate based on your observations. As we mentioned above, make sure that any last minute items that arise based on the inspection report or your own visual inspection during the walk through are addressed in writing and completed before you take ownership of the property.
If the seller agrees to make repairs, have your inspector verify the work is completed properly. Do not assume that everything will be done as promised.
If you’re buying a new house, off the plans from the developer, they will offer the Defect Liability Period upon Vacant Possession, where they will rectify problems, if any, with the house during Handover.
12. Buyer’s Remorse
No place is perfect. There will always be surprises. Don’t let a few initial blips spoil the whole ride.
And don’t miss a great house waiting for the perfect one!
Failing to jump on an opportunity, I believe, is a mistake. Too much shopping around can backfire. When you have done your homework and when you see something you that matches, go for it.
Source: asiaone
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
“Ring Of Fire” – Bill Gross, No.10 in 25 Most Powerful People In Business And 3 Times “Fixed Income Manager Of The Year”
Bill Gross is the managing director of PIMCO—one of the world’s largest fixed-income asset management companies, with $1,001 billion in assets under management as of the end of 2009. He has being ranked No. 10 in Fortune magazine’s list of the 25 most powerful people in business. In 2007, he was named “fixed-income manager of the year” by Morningstar for the third time in 10 years.
In his February online investment outlook letter, entitled “Ring of Fire”, Gross lumps the U.S. in the “ring of fire” along with vulnerable countries such as Spain, Greece, Italy, Ireland, and the U.K. in terms of investment risk. He said all these countries have government debt approaching 90% of GDP!! And this, says Gross—citing a book by Carmen Reinhart and Kenneth Rogoff called This Time is Different—is bad news, as such high debt levels slow growth by 1% or more, slashing returns on investment and on financial assets.
Gross also cites a McKinsey Global Institute study titled “Debt and deleveraging: The global credit bubble and its economic consequences.” It looks at total debt, public and private, and concludes that countries that enter financial crises with lower initial debt levels can respond far better—explaining why India, Brazil, China, and Canada were relatively shielded from the recent financial downturn.
Gross advises investors to put growth and currency assets in developing economies, especially in Asia. He wrote: “When the price is right, go where the growth is, where the consumer sector is still in its infancy, where national debt levels are low, where reserves are high, and where trade surpluses promise to generate additional reserves for years to come. Look for a savings-oriented economy which should gradually evolve into a consumer-focused economy. China, India, Brazil and more miniature sized examples of each would be excellent examples.”
Similarly, he recommends investing fixed income assets in those same countries if possible, though, since emerging markets have less developed financial markets and lower liquidity, fixed-income investors may need to turn to developed economies. His top choice for now would be Canada, because its “conservative banks never did participate in the housing crisis and it stayed closer to fiscal balance than any other country.” His next choice is Germany. The one to avoid at all costs: the U.K.
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
My Contributing Article For Moolah.asia, the 1st Flipping Financial Magazine Online!
Hope that everyone enjoyed their long Lunar New Year! After a long holiday, it is now time to get our engines running again and strive towards our goals for the Tiger year. I’ll like to start my blog rolling with a piece of good new – I’ve been invited to be a contributing writer to this online financial magazine – MOOLAH.asia
My very first contribution is a chapter extracted from my eBook (if you have not subscribe for it, you can do so for FREE at the bottom of this page) which I re-wrote to cater for their Valentine’s Day theme. Wow, I never thought that I could really write before starting my blog, and now I’m invited to be a writer! Of course, I must first thank all of you for showing support to my blog, that really gave me a whole lot of encouragement and confidence 
Due to my agreement with the MOOLAH.asia folks, I can only publish part of my article below. But not to worry, MOOLAH.asia is a FREE magazine, so you can access my article along with the other interesting content simply by registering at their magazine site.
I’m extremely excited about this new online venture and it is definitely a great motivation for me to continue writing. Now, let’s take a peek at my virgin editorial contribution:
Why You Should Never Fall In Love With Stocks
Love is an integral part of our life and we should show our love to people we care for – our spouse, parents, children, siblings, friend etc. But as a trader, bear in mind this golden rule in the stock market – NEVER fall in love with stocks!
Just because you are working in a specific company or have made money from a certain stock before does not mean that you should buy and hold onto the stock blindly. Buying and selling decisions in the stock market need to be made with logic and reason, not with emotion.
Let’s take a look at Cosco Corp below, which used to be a hot potato in the Singapore stock market. Note that the phrase ‘used to’ signifies that its glorious days are already history.
Cosco Stock Chart
The Ship That Sank Along With Their Money
Cosco is a famous shipping company in Singapore, and its stock has enjoyed spectacular ratings from several analysts and broking houses. Cosco’s share price has been climbing up since its IPO days and whoever bought it during its early days would surely have loved Cosco like crazy! However when its earnings started to decline during the 2007 financial crisis, a lot of people did not pay attention to how overpriced the stock really was.
The shareholders of Cosco were probably thinking “Come on, the price has fallen this much already, how much lower can it go?” Even when the stock dropped to S$6 from a high of S$8.20, they continued to reassure themselves that “good companies will always rebound” and “you just have to be patient in the stock market”.
Come On, It Can’t Go Any Lower.. Can It?
Sad to say, thousands of shareholders who believed in the “it can’t go much lower” theory was proven to be wrong over and over again each time the share price breaks a new low in front of their eyes………….
…………………………………………………………………………………………………………..
The MOOLAH.asia guys forbid me to reveal any more than this, so please visit their magazine site and subscribe for FREE to read on 
May the trend be with you guys! Cheers
To your Dream,
Derick
“Dreampreneur” – Engineer Your Dream. Be an Entrepreneur.
China Encourages Silver Bullion For Investment
China has introduced its first-ever investment opportunity for silver bullion. The bars are available in 500 grams, 1 kilogram, 2 kilograms and 5 kilograms with a purity of 99.9%.
Days Of Making Easy Money In the Stock Market Are OVER! Join Me At My FREE Seminar To Find Out How To Select The Right Stocks and Capitalise On Them To Accumulate Our Wealth.
Remember those early days of March, April and May this year when almost any stock that we bought then would have made us very good profit? SORRY!! Those days of making easy money are already over! The 86% rally of Straits Times Index (STI) from early March of 1455 till now is abit too fast, too much and too far ahead of the real economy!
1)Where will STI and the global market be heading from here?
2)What are the common mistakes a lot of traders SHOULD NOT commit in the market?
3)How, when and what stocks to select so that we can participate in the current rotational play in the market? How to exit and lock in our profits? How to perform correct money management to grow and safeguard our money?
Join me at my FREE seminar whereby I will share all the above mentioned and much much more…. so that we can all learn how to accumulate and protect our wealth in the stock market. For more details, please visit www.trackthetrend.com/t30 to find out.
Hope to meet you guys in person soon!! Cheers
A Christmas Card from your Investment Relationship Manager ;)
Best Regards,
Your Investment Relationship Manager
PS: Expect even better investment performance from us next year in 2009
Can National Day and Olympics bring relief to our battered market?
Dow Jones was down 51.7 pts or 0.45%, closed at 11326 last Friday. The resistance level of 11634 appeared to be a resilient one, which Dow Jones has failed in its another attempt to penetrate it. The next support is at 11125. If this level were to be broken, then the subsequent support will be at 10680. If this critical 10680 level also cannot hold on, then Dow Jones will continue to decline and all hell will break loose 
NASDAQ was down 0.63% or 14.59 pts to close at 2310 before last weekend. It appeared to have found support at the 2258 level of the long term uptrend line. If this level were to be broken with big volume, then the support of 2155 will be revisited again.
S&P 500 closed at 1260 last Friday, down 7.07 pts or 0.56%. It is hovering along the downtrend line, around the 1256 level. If this 1256 level fail to hold, then S&P 500 will have further downside risk. Its next support level will then be 1219.
STI dropped 23.58 pts to close at 2906 last Friday. It failed to penetrate its long term uptrend line and the resistance level of 2961. Watch out for the support level of 2860. If this level were to broken with huge volume, then the next crucial support level will be 2746. If this 2746 level were to be penetrate as well, then the period of time whereby STI plunged almost 30% from a high of 3900 to 2746 were be back to haunt us again
On the eve of National Day last year, STI soared 111.16 pts or 3.4%. Will there be another similar rally this week around National Day? Key earning results of SGX, DBS, UOB & OCBC will be out this week, we will be able to assess how the econmic slowdown has affected the bottomlines of these blue-chips. Of course, the start of Beijing Olympics on 8thAug may also bring about a much-needed rally for the market. If there is really going to be a rebound, then it will be good opportunity for you guys to sell into strenght to exit your so-called “long-term” holdings. Pls remember that even if any rebound were to materialise, it is ONLY a rally in the bear market! I want to stress again:WE ARE NOW IN A BEAR MARKET!
Cheers
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
Where is the market heading? How can we do Hedging to PROTECT our portfolio?
Last week, Dow Jones fell 1.1% and closed at 11370. It seems to have encountered a resistance at 11634. Like what I mentioned before, if 11634 can be penetrated strongly with significantly high volume, then Dow Jones will have a chance to experience further rally from this level.
NASDAQ rose 1.2% last week and closed at 2310. It seems to be always finding support at around 2252. Its next resistance level is 2385. If this 2385 level can be broken significantly, then it will be able to appreciate further.
S&P 500 dipped 0.2% to close at 1257 last week. It seems to have found cushion at 1256. If the downtrend line around the level of 1265 can be broken with good volume, then S&P 500 will have good chance of going higher. Its next resistance will then be around 1320.
STI closed at 2922, down 55 points last Friday. It seems to have met resistance at around 2993 of the long term uptrend line. If this level is broken, then its next resistance will be the psychological level of 3000.
Oil price has fallen to US$123 per barrel, down almost US$25 or 16% in 2 weeks!! In US, more companies are going to report their earnings this week. There maybe more bad news coming our way. If this rally can be sustained, it maybe a good opportunity for u guys to sell off your long positions which u bought last time at a good price, or what we known as “sell into strength” before the market turn ugly again.
Right now, the market is trying to find its direction, deciding its next move whether to go up or down. This is the best time to do “hedging” for our portfolio, which means holding both long and short positions. If let’s say the market tank, our long positions will not drop too much(provided that we buy really strong stocks) while our short positions will tumble further(provided that we short really weak stocks). On the other hand, if the market were to rally, our strong long stocks will go up while our weak short positions will not increase too much. In this either way, our portfolio is always protected. I strongly believe that we have to learn how to do SHORT-SELLING in a bear market, in fact it is a MUST if one want to make money in a down market. If one knows how to perform shorting, he/she can be his/her own hedge fund manager during periods of uncertainty. For your information, a person needs to have an asset of around a few hundred thousands before he/her can invest in a hedge fund in S’pore. There is little chance for ordinary folks to have the financial capability to invest in such hedge funds, which are only meant for the rich & wealthy.
Let me share with u guys on how to perform SHORTING in a correct and safe manner in my future post. Meanwhile, live and enjoy your life to the fullest!
Cheers
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
Is this Rally for real? Can it be sustained?
Bear market doesn’t drop in one straight line downwards. What happens is that after the stock market has tumbled and hit a support area, it will rebound to stage a bear rally, whereby it will “suck” in ignorant/uninformed retail investors. When the rally cannot be sustained, it will then continue to decline further. Take a look at STI below for an example.
STI melted down almost 30% from the high of 3900 to a low of 2746. After-which, it staged a sucker rally. It tried to penetrate the resistance of 3300 several times, but was all unsuccessful. As a result, it tumbled once again after that.
Dow Jones has rallied for the past few days with increasing volume, showing that the rally is backed up with strong buying. It’s K-line(a proprietary tool of T3B System to assess risk level) is also at the rock bottom, thus signalling that the risk level has already been reduced significantly. Right now, it has almost reached the resistance of 11634. If this level can be broken with significant volume, Dow Jones will experience further upside rally.
NASDAQ has rebounded from its support of 2155 with increasing volume. If the next resistance of 2385 were to be broken with strong volume, it may stage a further rally from there.
S&P 500 has found support at both 1219 and 1256 respectively with huge volume. It’s K-line has also bottomed up. This should propel it to rally upwards to the next resistance level of 1320.
STI will have enough momentum to go even higher if it can penetrate 2961 with good volume, with the next resistance at 3000 points.
US Indexes have been rallying because of falling oil price, FED curbing of naked short-selling for 19 financial firms, corporate earnings are not as bad as what many analysts have expected…etc. Did they rally because the worst is over? Personally, I do not think so. US still has many problems on hand, such the sub-prime crisis, housing recession, inflation…etc., with more write-downs expected to come along the way. So this rally may not be able to sustain for too long due to the weak US economy. For some of u guys who are still holding on to stocks which u bought since long time ago, maybe it is a good time to sell into strength before this bear rally fade away again…..
Pls trade with care, my friend! Cheers
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
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