Four Real Estate Mistakes You Need to Avoid
The renovation of your home can be an expensive and time-consuming endeavor, which you’ll want to do right the first time to avoid costly mistakes down the road. Fortunately, real estate developer Shalom Lamm has identified four mistakes he sees people make frequently when renovating their homes, and he’s outlined the solutions to these common pitfalls here in his article on how to avoid real estate mistakes that could cost you money.
Too Much Renovation
Lamm, a developer who has worked on several high-profile projects throughout New York City, says that people can fall into a trap by focusing too much on renovations instead of overall quality. Sometimes people try and renovate their way out of a problem space or a mistake. For example, someone might buy an old brownstone because it’s cheap but then spend all their time trying to fix it up. People sometimes fall in love with something that may not be financially viable to repair, said Mr. Lamm. People forget why they bought what they did, he added. People fall in love with renovation; they get addicted to it; they start looking at square footage rather than comparing sales prices per square foot for similar properties nearby.
Underestimating Renovation Costs
No matter how much you anticipate a renovation costing, it’s almost always going to cost more than you think. The best way to counter that is by preparing a very detailed budget before you begin. In order for your budget not to go over-budget, know exactly what can be done by someone else and what must be done by you. That will help separate those things from those that are optional but would make your home look better or work better. For example, painting or replacing carpeting can be done professionally and probably should if they’re part of your main living area—but installing cabinet hardware and light fixtures yourself may take less time and cost less than paying someone else to do it for you.
Not Budgeting For Repairs
This is a common oversight among first-time homebuyers. Renovations can be disruptive, and it’s easy to feel you want to rip out that ugly wallpaper right away. But an improperly executed renovation can lead to thousands of dollars in unnecessary expenses—and can even destroy your home’s resale value if it’s not done properly. So make sure you budget for repairs as well as upgrades when planning your renovations. A good rule of thumb is for every $1,000 you spend on renovations, budget another $1,000 for repairs.
Starting Renovations Before Being Pre Approved
Pre Approval can also prevent you from jumping into renovations before you’re ready. If you start doing work on a home before getting preapproved, you might not be able to get a mortgage, says Shalom Lamm. One slip-up during renovations could cause an issue with your loan or result in costly repairs down the line that prevent you from closing on time. It’s better for everyone involved if you don’t begin any construction until approval is secured.