Buying a home can seem stressful and overwhelming, and it isn’t without its share of potential pitfalls. If you’re aware of those issues ahead of time, you can protect yourself from costly mistakes and shop with confidence. Here is a list of common errors and how to avoid them:
Home buyer mistake # 1: Never buying the first home.
Many first-time buyers purchase a home because it is such an improvement over a renting situation yet many others never take the leap. Take all the time you need to view homes and make a sound home buying decision, but don’t be afraid to commit to a new home purchase. Cold feet are natural, but don’t miss out on your dream home.
Home buyer mistake # 2: Choosing the wrong agent.
Don’t make buying a home more difficult by choosing the wrong agent. You want a buyer’s agent who works for you and understands your needs and financial limitations. Your agent should spend time with you and walk you through the process so it’s important to choose someone who is both competent and enjoyable to work with.
Home buyer mistake # 3: Shopping for homes before shopping for a mortgage.
Buyers who look at homes before talking with a lender are shopping without a budget. When you talk to a mortgage broker you’ll get a better idea of the loan options and the price ranges you can afford. After completing the pre-approval process, you will be a more educated consumer, ready to buy a home. Asking for referrals to a few prospective mortgage companies can be a good way to find someone you can trust. Interview prospective loan officers and ask questions until you feel comfortable.
Home buyer mistake # 4: Skipping the inspection process.
Failure to have the property professionally inspected for structural, mechanical, safety, and environmental defects can lead to buying the wrong home. Inspections turn buyers into informed consumers. Knowing as much as possible about your home purchase will allow you to make an informed decision, so don’t skip the inspection process.
Home buyer mistake # 5: Being swept away by staging or minor upgrades.
These inexpensive tricks are a seller’s dream for playing on your emotions and eliciting a much higher price tag. Sellers may pay $2,000 for minimal upgrades or staging that you’ll end up paying much more. If you’re on a budget, look for homes whose full potential has yet to be realized. Also, first-time homebuyers should always look for a house they can add value to, as this ensures a bump in equity to help you up the property ladder.
Home buyer mistake # 6: Buying the wrong home.
The very first thing home buyers should do is make a list of priorities and define your home purchase objectives. Figure out what features and benefits are most important and which you can live without. Before you make an offer, review your lists to make sure the home is right for you.
Home buyer mistake # 7: Rejecting a great place because of lack of vision.
Even if you can’t afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford. If the home otherwise meets your needs in terms of the big things that are difficult to change, such as location and size, don’t let physical imperfections turn you away. Besides, doing home upgrades yourself, even when you have to hire a contractor, is often cheaper than paying the increased home value to a seller who has already done the work for you.
Home buyer mistake # 8: Altering your financial picture after your bank mortgage pre-approval.
Today’s home buyers sometimes make a critical mistake. After getting their pre-approval from a bank or mortgage broker, they go and make a major purchase which alters their financial situation and ability to afford a home. Do not buy anything on credit and / or with a credit card once you have completed a loan application. Do NOT buy:
- Automobiles and motorcycles
- Washers, dryers, refrigerators
- Lawnmowers or garden equipment
- Expensive electronics or computers
- Furniture for your new home
Slight alterations in your credit could cause your loan to be denied.
Home buyer mistake # 9: Buying a home with an incurable defect.
Whether you are considering a new build or an older home, no residence is perfect. Fortunately, most homes don’t have incurable defects. These obvious problems include a bad floor plan, poor location (such as near a noisy freeway or adjacent to the city dump), heavy street traffic and lack of adequate parking. In most cases, these issues cannot be resolved by the buyer and will still be an issue when the home is sold at a later date. Be sure to avoid these types of defects or at least consider them when determining the price you’ll pay for a home.
Home buyer mistake # 10: Buying the most expensive home on the block.
It’s wonderful when you find your dream home, but if it’s the most expensive home on the block you could have a problem. Quite simply, your neighbours’ lower home values will dampen yours. Remember, people who buy a $300,000 home usually want to be surrounded by other $300,000 homes, not $100,000 bungalows.
By avoiding these common mistakes, you will help to make your real estate transactions much easier and help achieve your long term goals. To discuss your specific real estate needs, select the “Ask the Agent” button above and let’s get started today.
