Buying a home can be a daunting experience...but it doesn't have to be! If you avoid these top 8 home buying mistakes, you will be on your way to your new home.
Continue reading for more information on these mistakes and tips to avoid them...
Mistake #1: Failing to have a plan
Deciding to buy a home is probably the biggest financial decision you will ever make. It is an exciting decision, but it is serious business too, and you deserve serious advice. With a game plan, you will eliminate many of the headaches involved in this complicated transaction.
You should have a clear plan when deciding to buy a home. Evaluate your current situation. Do you currently own a home? If so, will it be necessary to sell before making another purchase? Are you renting” How much time is left on your lease? What is important to you about the location of your home? How close do you need to be to schools, work, shopping?
Make a list of features that are important to have in your next home. List your desired price range, locations that you would like, number of bedrooms and baths, and any other amenities. Be specific and prioritize your list. It is unlikely that you will find a home that offers every feature you desire, but a list will help you identify homes that best meet your wants and needs.
Share your list with your real estate agent and review the details and priorities. Your agent will look for homes that best match your criteria, saving you time looking at homes that don’t fit your needs.
A proper game plan will save you time and reduce the stress of shopping for a home. Invest time at the beginning and you will have a more satisfying home buying experience.
Mistake #2: Thinking “I can’t afford a home”.
Many people feel that they cannot afford a home, but affording a home has never been easier! Mortgage rates are more flexible today than in years past, and you may be able to benefit from current tax laws.
Homeownership is a durable investment. Although no one can say if a specific home will appreciate in value, generally speaking, the odds favor the homeowner in the long run.
Numerous tax advantages are available to homeowners. The thousands of potential dollars you pay in interest on your primary residence are tax deductible. This tax deduction alone can sometimes make owning a home cheaper than renting.
Check with your accountant about applicable real estate tax deductions and the potential benefits of homeownership, and consult with a mortgage lending professional about current interest rates and loan programs.
Mistake #3: Not selecting the right real estate agent
It’s not likely that you interview very many people. Yet, in order to find a real estate agent who is right for you, consider interviewing several agents. The quality of your home buying experience is largely dependent upon your skill at selecting the best qualified real estate agent to represent you.
Agents make it their business to provide all services connected with your home search, from expert advice in the early stages to careful monitoring of your settlement. The more closely you work with your agent, the more effective your home buying experience can be. What qualities are important to you in selecting the right agent? Consider these characteristics:
The right real estate agent can make the home buying process a satisfying and profitable experience.
Mistake #4: Failing to get pre-qualified or pre-approved for a mortgage
Don't waste hours searching for a home that is not in your price range! Save time and money by pre-qualifying for a loan first. The pre-qualification process is simple. A lender will ask you basic questions concerning your financial history, run a credit report, and determine your buying power. Pre-qualification not only helps establish your affordability range, but also strengthens your negotiation position by letting the seller know you are serious and well qualified to buy their home.
To be absolutely certain that you can be approved for a loan, you may want to be “pre-approved.” In the pre-approval process, all of your documentation is completed and submitted to an underwriter often before you find the home you want to purchase. The pre-approval that you will receive is an actual loan commitment from a lender – your guarantee of loan approval.
You deserve peace of mind and stronger negotiating power by getting pre-qualified or pre-approved for a loan before you make an offer.
Mistake #5: Not shopping for the best loan program
It would be a mistake to think just because someone else got a great loan, at a great interest rate from a certain lender, that you would be able to do the same.
It is recommended that you meet with an expert who can clearly explain the many different types of loan programs and explain each of their benefits and risks. Explore all the possibilities, weigh your options carefully and then make an informed decision based on your needs.
A few considerations to keep in mind are:
Just as you should interview your real estate agents, you should also interview lenders. Not all lenders offer the same programs or have the same lending options and interest rates. Select a lender who is willing to discuss your needs and help you choose the loan program that is best for your situation.
Mistake #6: Failing to obtain a home inspection from a qualified inspector
A home inspection reports on the visible structural and mechanical condition of the home. After the inspection, you will have the facts you need to make a decision about buying your home.
A well-qualified home inspector who has adhered to federal licensing standards can spot problems that you might not be able to see. Expect problems to be clearly explained, repair expenses closely calculated, maintenance costs estimated, and a written report delivered within a day or two after the inspection is complete.
Most home-purchase contracts are written conditional on the outcome of several inspections. These inspections may include inspection for wood boring insects, existence of moisture or mold, excessive amounts of radon gas, structural soundness, and the condition of the heating, wiring and plumbing. When the contract is written, it should identify who will be responsible if there are problems with the results of any of these inspections.
Mistake #7: Not knowing your rights and obligations
Real estate law is extensive and complex. The sales contract is a legally binding document between the buyer and seller. An improperly written contract can cause the sale to fall through or cost you thousands of dollars in unexpected repairs, inspections, and remedies for title defects.
I will assist you and make sure you understand the technical language in the sale of your home. It is my job to know the laws governing real estate transactions. I keep myself current on real estate laws by continuously attending seminars and training courses.
You deserve to have an agent who is not only knowledgeable about the transaction but is also willing to educate you throughout the process so you will feel more comfortable.
Mistake #8: Failing to make your own inspection
You probably would not want to rely on the seller to point out defects in a house he is attempting to sell. There may even be hidden problems of which he is unaware.
Before you sign a contract and schedule a professional inspection, there are items you can check yourself:
A few final tips:
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