Top 10 Home Buying Mistakes
You've probably been told a million times, "Its the biggest investment decision you'll ever make." And you know what, for most folks, it is. Why not avoid the potential hinderences that can turn a positive buying experience into a unceasing headache or regret! Consider the following HUGE mistakes, and navigate around them.
1. Flying solo. Purchasing a home is a complicated transaction... DON'T DO IT ALONE. My first recommendation is to work with an experienced Realtor, but even if you don’t use an agent, assemble together a group of trustworthy professionals (lawyer/closer, lender, property inspector, termite/moisture inspector, and so on). You'll need these individuals are a necessity. But take caution: they may not always work well together, so using a Realtor's proven teams is a much stronger option.
2. Saw it/Gotta have it. Love a first sight may work in some relationships, but there are many variables to a home purchase. Is it within your budget? Does it fall within your Needs/Wants list? What's the neighborhood like... after dark or during rush hour? Perhaps you don't have children, but this plays a factor when consider resale down the road. Check out the neighborhood schools. You'll be glad you've done your homework before you sign.
3. Not getting pre-qualified and pre-approved. Talking with a lender for pre-qualifification will provide a general idea of how much you can borrow. Now you'll know what price range to look in. Getting pre-approved means your lenderr has verified all of your information, credit, debt/income ratio, and agrees to lend you a specific amount. You are in a better position to go house hunting knowing exactly how much you can afford and that you have financing.
4. Buying Too Much House. You may qualify to borrow more, but can you afford to? Compute your monthly costs: housing, schooling, clothes, food, utilities, transportation, cell phone, entertainment, and savings. As a general rule, your total monthly debts, including your mortgage, should not exceed 36 percent of your income before taxes. Be sure to budget enough to cover closing costs. This is often two to five percent of the purchase price (though your agent might be able to negotiate for the seller to pay this), plus moving, redecorating and maintenance. Allow for increases in ongoing expenses such as utilities and taxes. Don't bite off... well you know.
5. Being Naive. No matter how much you like the agent, sellers, inspector, or the mailman who vouches for the Sellers, don't forget this is a business transaction. Buyer beware - your decision is binding. Do your own research and know your support team’s roles and responsibilities.
6. Relying on "but they told me." I doesn't mean anything if its not IN WRITING. While verbal agreements may be legal, they ARE NOT ENFORCEABLE! Written agreements almost always trump oral ones when it comes to contracts. If the offer says the patio furniture is negotiable, but the agent says it’s included, get it in writing.
7. Overlooking the fine print. Understand what you’re signing before you leak the ink. If possible, get documents in advance, read them, and ask questions. A true professional (lawyer, realtor, closer) will be happy to assist.
8. Not considering resale when buying. Don't purchase a home that will be difficult to sell later. This could include functional obsolence (4 bedroom house with just 1 bathroom, seriously awkward floorplan, etc), excessively higher priced than neighbors (3000 sqft house in community of 1200 sqft homes). Poor school system, or stigmatized neighborhood.
9. Making unconditional offer. Protect yourself with at least 2 of these offer contingencies:
- Mortgage financing -- You’re pre-approved, but is the house? The house must appraise in order for the bank to fund the purchase. If the house appraises lower than the purchase price, you my not get financed!
- Inspection -- NEVER buy a home (new construction or existing) without a thorough home inspection. Get an outsider's professional opinion on the property's condition.
- Insurance -- verify the ability to get adequate coverage. In some areas, it’s difficult to get hazard or flood insurance.
10. Having buyer’s remorse. Despite the heightened emotions and lovely asthetics, there is no "perfect" house. You may run into surprises along the way. Don’t let a few initial bumps spoil the experience. Also, don’t miss out on a great house by erroneously thinking there is a another "perfect one" out there somewhere. Do your due diligence, consider given professional advice, then move forward.
Buying a home can and should be a wonderful experience. It is not always stress free, but it should certainly be positive and rewarding. As a Realtor, I can help you navigate through this process. Please take advantage of my years of expertise! Call (757-581-9058), email (only1ruben@hotmail.com), or utilize my FREE resources at Only1Ruben.com and Only1HamptonRoads.com.
