14 Home Buyer Mistakes
We learn from our mistakes but when buying your home becomes a mistake the financial woes can really stack up. I learned first hand about mistakes when I was buying my first home and the first agent I hired was nothing shy of an idiot. I was about 26 years old and it wound up costing me the prices of an appraisal, a survey, an inspection, 5 weeks of my life and a friend. Okay, he wasn’t a friend after all, but I would rather have not spent a bunch of money to find out what I could have eventually learned for free.
14. Buying a House for Its Decor
Make sure you see beyond the decorations and look at the bones of the home. A seller will spend a lot of effort to distract you with nice furnishings, especially new home builders using a model home. Focus on the floor plan and the square footage and how it will serve you.
13. Not Researching the Neighborhood
Research the neighborhood before you buy! Make sure you are happy with the location, amenities and schools. You’re not just buying a house, you are buying the life around it.
12. Not Thinking About Resale
When you are decorating and renovating your home, you need to think about what is going to appeal to a broad section of buyers when it comes time to sell it. Buying houses and being in the real estate market is like chess: You always want to look two or three steps ahead in the game.
11. Trusting Everything a Real Estate Advertisement Says
Face it folks, “cozy” means small, and “as is” means it needs work. Follow the old adage: If it sounds too good to be true, it probably is.
10. Hiring the Wrong Buyer’s Agent
Talk to friends, family and co-workers who have bought a house before and ask about their experience. You should make sure the agent at least knows the area, knows how to negotiate the contract and how to protect your interests. There’s more than one way to do business so if you are not happy with the first agent you meet, move on!
9. Not Hiring an Agent
There’s more to an agent than finding you a house. Having an agent to promote and protect your interests is important. You want to buy a house on your terms, not someone else’s and if you wind up in a lawsuit that’s the least of what can happen.
8. Buying the Most Expensive Home on the Block
Life in the middle is good. Being a smaller home in a neighborhood of bigger homes is a good investment, not the other way around.
7. Not Setting a Realistic Budget
Stick to your budget, not what the bank says you are qualified for. They don’t know how often you eat out or how much you like to travel. Think before you become house poor!
6. Not Being Pro-Active at Settlement
Don’t believe everything you are told. Your mortgage lender ordered an appraisal so read it. You had a home inspection (Please say you did- See Mistake #3) so be sure to complete a re-inspection to review items you asked to be repaired. Review receipts from the work done and then carefully review your closing documents. The HUD statement discloses all the fees you are paying so be sure they match up with what you were told when you first applied for your loan. Ask questions of your closing agent if you don’t understand and don’t sign until you do.
5. Skipping the Loan Pre-Approval Step
When you are pre-approved, the bank is saying, “we will give you a mortgage of up to this amount, so now all you have to do is find your home.” Some sellers only allow real estate agents to show their house if someone has a pre-approved letter. That indicates that the shopper really is serious about buying a home. Now that NC uses a due diligence contract, time is money. Getting pre-approved saves you time, so in turn you can save money.
4. Falling in Love With the First Property You See
Okay, this is not a necessarily mistake and actually happens more often than you might think. What’s important is that you look at a few more so you can be sure. The average home buyer will look at 6 to 12 homes before they make a decision.
3. Buying a Home Without a Professional Inspection
NC requires home inspectors to have a license and they have a governing body to be sure they stay up to date in their working knowledge of the inspection process. It’s the best introduction you will have to your new home and is the best insurance you can buy to protect yourself from defects. You might even consider a home warranty to insure you against problems with the home during your first year. Just be sure to read it carefully so you know what’s covered.
2. Overlooking the Extra and Hidden Costs
Be sure you know what you are getting yourself into if you intend to do updates or make repairs after closing. You should review estimates with contractors before write an offer. Also, be sure to leave room in your budget for taxes and insurance.
1. Buying What You Want, Not What You Need
There can be a fine line between want and need, but there can also be huge differences. If you have to turn around sell in a year or two, you risk losing money and possibly a lot of money. In a normal Raleigh real estate market it can take 3-4 years to break even with the expenses of buying and selling. The coup de grâce is being miserable in house that you just dumped all your savings into.
