Top 10 Mistakes to Avoid When Buying a Home

Buying a home is one of the most exciting things you can do, but don’t let
the excitement overwhelm your common sense. If you’re not an experienced home
buyer then it’s easy to fall victim to these Top 10 Mistakes that Homebuyers
Make.

1. Buying a home before you are ready for home ownership

Lots of people get pressured into buying a home by well meaning friends and
family who tell them what a waste of money renting is. While renting does not
build equity, it comes with a whole lot less responsibility and expense than
home ownership does. Take your time and don’t buy until you are ready to buy.

2. “Falling in love” with the house.

This happens when we are overwhelmed by the emotional aspects of buying and
spurred on by the subtle pressures of the seller and their agent. Just like we
tend to overlook the faults of people we love, a buyer who falls in love with a
house might end up overlooking flaws that will haunt them later.

Buyers often find out things after the sale that might have stopped them
from buying if they knew in advance. Although Agents and sellers are obligated
to disclose certain defects or circumstances about a property, those
requirements may not cover everything that you’d want to know. After reading
the disclosure list, if any, ask specific questions about anything else that’s
important to you. For example, if the idea of living at a former crime scenes
turns you off, ask if any major crimes or incidents occurred at the home.

3. Misunderstanding the loyalties of the Real Estate Agent.

In most areas the Real Estate Agent represents the seller and not the buyer.
That means that you can’t expect the agent to keep anything you say from the
seller. If you’re offering 200k, but you’ll go to 210k if you have to, keep
that secret to yourself. If the agent knows your top limit then he or she is
actually obligated to tell the seller if that’s who they represent.

4. Overpaying because of pressure or deceitful sales tactics.

Buyer soften pay more than they have to because they are warned that there
are “other offers” being considered so they need to make their highest offer
first. That may or may not be true, but never make an offer that’s higher than
you would make without any outside pressure. An offer is legally binding if it’s
accepted and you’ll have to live with that buying price for a long time to
come.

Another reason buyers overpay is because they don’t realize that anything
can be negotiated including closing costs, inspection fees and the price of
repairs. Real magic happens when a motivated seller and an earnest buyer sit
down to conduct business.

5. Failing to get mortgage pre-approval before shopping

Buyers who start the shopping process without being pre-approved for a
mortgage have a harder time getting their offers accepted and they set
themselves up for disappointment if their dream home turns out to be more than
they can afford.

You also run the risk of not getting the best mortgage deal possible if you
are forced to rush into accepting the first offer that you get.

6. Failure to get it all in writing

Buyers who accept verbal agreements or promises made on a handshake often
find that no one remembers that conversation at closing time. If it’s important
to you then get it in writing.

7. Not finding defects before you buy.

While new homes come with specific warranties and guarantees, you’re usually
on your own when you’re not buying new. Don’t rely on the word of the seller or
the agent when it comes to ascertaining the physical condition of the home. Protect
yourself by writing “Subject to satisfactory property inspection results”
on any offer you make and then hire a professional property inspection company.

Another word of advice is to find your own property inspector and do not
reply on one that is recommended by the seller or agent. Make sure you are
there when the inspector arrives and don’t let the agent or seller have any
conversations with the inspector outside of your presence.

8. Losing control of the transaction.

This is going to be your home and buying it is your decision. When you let
agents, friends or family persuade you for or against a particular piece of
property then you are losing control of the transaction. Just stop, relax, take
a deep breath and remember who is in control. It’s you.

9. Failure to do your own due diligence

The chances are your visit to the home of your dreams occurred during the
best time of day, but you’ll be living in that home 24/7. Visit the
neighborhood during rush hour, late at night and at other random times. Can you
deal with getting in and out of your neighborhood during your commuting times?
Does the sound of the nearby NASCAR track drown out backyard conversation on
Sunday afternoons?

Also make sure that the schools and community amenities suit your needs and
lifestyles. Check property taxes and utility bills to make sure that you can
afford the cost of living in your chosen community. If you are subject to deed
restrictions or homeowner/condo rules then make sure you can live with them. Even
automobile insurance rates are affected by zip code so the more you know about
a community the better off you are.

10. Buying more house than you can afford.

Just because the lender approved you for a certain amount doesn’t mean that
you can handle the payments. This is especially true if you have a
life-changing event on the horizon such as having a baby or changing jobs. Be
especially wary of your payment thresholds if you have an Adjustable Rate
Mortgage because you can bet those payments will be going up a lot sooner that
you want them to. Don’t forget to factor condo fees or homeowner association
dues into your monthly expenses.