The Top 10 Home Buying Mistakes
AKA “Don’t Do This!!”
- Doing it Alone – Purchasing a home is an involved, complex process. If you choose not to use a Realtor®, enlist the services of a lender, attorney, inspector and insurance company. Talk to family and friends for referrals and advice. Enlist help early in the process.
- Not getting pre-approved – Speaking to a lender and getting pre-approval gives you an idea of what you can afford and how much you can borrow. Your lender will verify your information and credit rating, then agree to loan you a specific amount of money based on their findings.
- Buying at first sight – Don’t let love blind you! Do your homework and make sure a home fits your family’s needs. Check out the neighborhood; drive through at different times of day and night to assess traffic, noise and congestion.
- Overbuying – Even though you may qualify to borrow more, can you really afford it? Analyze your budget. As a rule, your monthly debts, including your mortgage, should not exceed 36% of your income before taxes. Don’t forget about closing costs, moving expenses, and redecorating when considering a home.
- Misplacing your trust – You may really like your Realtor®, the sellers, and the inspector, but this is a business transaction. Know who you engage to be on your team during the transaction and what their roles are.
- Relying on oral agreements – When it comes to contracts, written agreements trump oral ones. Get it right and write it down! For example, if an item is written in the contract as negotiable and your agent says it is included, get it in writing.
- Skipping the fine print – Understand what you will be signing before picking up the pen. Request the documents and mortgage papers a few days before closing. Make sure to read them and ask questions if anything is unclear.
- Forgetting about resale – Avoid buying a home that is considerably higher than neighboring homes. Your neighbors’ less expensive homes will weaken the value of your home.
- Making an unconditional offer– Protect yourself with appropriate contingencies in your offer. At a minimum, your offer should be conditional on:Financing – You may be pre-approved, but the house may not be. A bank will want a formal appraisal of the property to make sure there is enough equity to warrant the loan. The loan may not be available if the home appraises for less than the sale price.Inspection – A thorough inspection of the home is a MUST. Walk through with the inspector to learn more about the house.
- Having buyer’s remorse – There is no place like home and NO home is perfect. There will always be a few little surprises. Keep the proper perspective and don’t sweat the small stuff.