8 STEPS TO BUYING YOUR FIRST HOME
Step 6
Perform Due Diligence
Unlike other purchases we make, a house can't be returned if you're unhappy with it, which is why property inspections and home owner's insurance are so important.
The property inspection is completed before you sign the closing papers and will expose any and all problems the home may have. Here are a few things you should keep in mind about inspections:
1. Structural damage. This should always be your main concern as structural damage is often very expensive to fix, if it's fixable at all. If the cost of repairs will be more than 3% of the home cost you should seriously consider whether or not it would be in your best interest to go through or walk away. Any damage that is not fixed can seriously affect the resale value of the home.
2. Minor repairs. Every home will have minor issues and it's best to over look them. Leaky faucets, nail holes in walls, missing light switch covers, all of these things can be repaired easily for very little money. Don't let these minor inconveniences distract you from any big issues that may be present.
3. Big problems. If your inspector finds a big problem it's best to bring in a specialist. A specialist will take a deeper look at the problem and let you know just how bad it is. Don't be afraid to walk away from the purchase if you feel the problem is more than you feel comfortable dealing with.
Once inspection is complete and you're satisfied and ready to move on, the next step will be to purchase homeowner's insurance. Insurance will protect you in the following ways:
1. Loss or damage of the property. Although unpleasant to think about, unfortunate things can and do happen. Fires, earthquakes, floods, these are all potential disaster that can happen and you should be sure to get insurance that covers all possibilities.
2. Liability for injuries. The insurance will also cover any injuries that may occur to people while on your property.
Remember, your home will be one of the biggest investments you will ever make and protecting that investment should be top priority.
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