MISTAKES TO AVOID WHEN BUYING A NEW HOME
A great way to make the home-buying process flow smoothly is to educate yourself and learn from mistakes others have made – this can make the difference between buying the home of your dreams and buying a “lemon.”
- Not getting pre-qualified or pre-approved
If you receive pre-qualification or pre-approval from a reputable lender, your negotiating position is strengthened. It shows agents and sellers you are serious about buying a home.
- Not seeking guidance from real estate professionals and inspectors
These people are trained in buying, selling and inspecting. Find someone you respect and trust and allow them to help – it will benefit you in the end.
- Choosing an agent haphazardly
Don’t jump from agent to agent just because you saw their name on a sign outside of a house you like. Interview at least three agents and choose the one you feel most comfortable with and who will focus on your needs.
- Not getting enough information about the properties
Obtain market statistics and sales records for the area you are considering buying a home in so you know how things (prices, conditions, list-to-selling price ratios) stack up in your neighborhood.
- Not looking at enough houses for sale
The more you see, the more you’ll learn about what you want and what each house is worth.
- Not making the correct price comparison
Don’t assess the value of a house only on the asking price. Your real estate agent should compile reports that reflect and compare the selling price of similar houses recently sold.
- Forgetting to calculate all the costs
When calculating the maximum price you can afford, don’t forget to include hidden costs, i.e. courier costs. Calculate a reasonable price range and look for a house that is priced closer to the +lower end of your range.
- Not asking enough questions
Don’t be afraid to ask questions! You’re not supposed to know everything about buying a home. Remember, this is potentially the biggest purchase you will make in your life – don’t get caught in a “lemon” because you didn’t ask enough questions!
- Not looking past the interior decorating or cosmetic improvements
Don’t choose a house because you like the interior decorating – that is not what you are buying and it will probably go with the seller when he moves. Check out the actual structure of the house!
- Not checking out every nook and cranny before purchasing
Go through the house with a fine-tooth comb. You don’t want to find out after you’ve bought the house that the roof is leaking. Open cabinets, turn on every switch, notice details, move stuff
WHAT TO AVOID PRIOR TO HOME OWNERSHIP
1. Spending more than you make. This can lead to real danger in not being able to afford to purchase. Create a budget you can live with and cancel credit cards you do not use before applying for a loan.
2. Not Saving Enough for Down Payment and Closing Costs. Be sure to include these items when working on your home buying budget. It will be difficult to come up with thousands of dollars if you have not planned ahead.
3. Failure to Understand Cost to Own and Maintain a Home. You must understand the expenses involved in ownership and plan your budget to include these items. All homes are different and the costs vary depending on the type of home and construction.
4. No Knowledge of Mortgage Products. Investigate the types of mortgages available and find one that fits your needs. No two are alike and the costs can vary greatly. Shop lenders for the best rates and terms.
5. Failing to Seek Professional Help. If you find you are in financial trouble and getting deeper in debt, seek professional counseling to improve your credit history and ability to purchase a home.
6. Failing to Control Your Home Purchase. This is your home and be sure you are in charge of the location, style, and price you can pay. Never let family, friends, or a Real Estate Agent sell you on something you do not want.
7. Indecision. Know what you want in regards to your future. If you are unsure, now may not be the right time for you to buy a home.
8. Purchasing a Home Before You Are Ready. Buying a home is a major commitment. If you are not prepared for the responsibility of ownership and the financial obligation it creates by all means rent.
Written by Staff