Jamil Damji, a property flipper and host of A&E’s Triple Digit Flip, is a real estate expert. Throughout his career, he has offered advice to those interested in buying a home, including tips on what to avoid before and after the purchase.
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If you’re thinking about buying a home, here are some potentially costly mistakes to avoid, according to Damji.
Underestimating your budget
In a video on his YouTube channel titled “3 BIG Fixer-Up & Flipper Mistakes to AVOID at All Costs,” Damji details some of his biggest mistakes at home. Perhaps the most notable one that other prospective homebuyers should be aware of is the impact underestimating your budget can have on your finances.
Many people, whether they are buying a home as a primary residence or as a home to fix up, underestimate the total costs. This is especially true for those who intend to renovate and sell their property for a profit.
Damji said many people turn to a contractor to get an idea of how much renovations will cost. But while this may seem like a safe bet, he noted that total costs are often higher than expected.
To avoid a potentially costly mistake, she suggested adding a 20% margin to your budget and getting multiple bids before committing to anything.
Paying people without vetting them first
Damji also recommended being cautious when choosing contractors.
While it may be easiest to hire the first person you find for your project (who also offers you a decent bid), you could get into trouble if you do this. Damji admitted that he lost money by paying the wrong people and watching them walk away.
To avoid this, carefully research anyone you’re going to hire for your project. Check online reviews or ratings for their company. Find out where they’re located. Make sure they’re legitimate and that you fully understand (and agree with) their policies and processes before hiring them.
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Know your design theme
Whether you’re sprucing up your home for yourself or for the next buyer, it’s important to be aware of the design theme. Otherwise, you could end up spending too much time and money on a project that’s not cohesive or not what you wanted in the first place.
In the worst case, you will have to redo several aspects, which will cost even more.
As Damji noted, designs can be a “very trendy phenomenon.” If you’re quickly renovating your home, you’ll need to pay attention to the latest trends and try to get ahead of them to attract the most buyers.
Try not to over-improve or under-value your home
In another of his videos, titled “Top 4 Mistakes When Fixing and Renovating a Home: I WAS DOING IT SO WRONG,” Damji talks about falling in love with your first home project and how this can end up being problematic as it can lead to some costly mistakes, such as over- or under-improving a home.
Over-improvement can involve making so many changes that it becomes excessive. These changes are often emotionally motivated and can become a major money pit.
To avoid this mistake, check out the neighborhood where the home is located to see what other people are doing to improve their home and what buyers like. You can also check sites like Zillow to see what types of features are highlighted in their available listings.
Under-improvement is the opposite. It’s about doing too little and not getting the expected results. An example of this is someone trying to renovate a house in an upmarket neighborhood, but using cheap or poor quality materials. Buyers will notice and likely not offer as high a price, if at all.
Don’t give contractors too much freedom
On the topic of contractors, Damji has plenty of other tips for avoiding potentially costly mistakes.
A common mistake is giving contractors free rein over the design elements of a project, which can backfire in several ways.
Contractors may claim to use the best materials, but if you don’t check, you could end up with poor quality materials or materials that aren’t really suited to the project. Not all contractors have the best ideas either, so giving them free rein could lead to some poor and costly decisions.
Damji also said that some contractors ask for a large amount of money up front. While paying a deposit can make sense, he advises against giving them more than 25%. That way, they’re less likely to take your money and you’re more likely to get results.
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This article originally appeared on GOBankingRates.com: The 5 Costly Home Buying Mistakes to Avoid, According to Real Estate Expert Jamil Damji
