Top 3 Home Buyer Mistakes

Buyer Mistake #1 – Lack of Financial Planning

The most common buyer mistake is failing to prepare one’s finances.   Many people feel they have a general idea of what they can afford because they already have some sort of monthly housing expense, and expect that they can continue to pay the same or less when they get a mortgage.

When first-time home buyers start thinking about investing in a home, they get so excited by the thought of where they are going to be living, that they forget about the financing of the home.  If one is buying a home with cash, all one has to do is provide a “proof of funds” letter from the bank to show the seller the house can be afforded.  For most people, however, financing will be needed.  To avoid the first mistake, one must be sure to talk to a lender to figure out how much they will be able to borrow!

Getting pre-approved for a mortgage will make everything go more smoothly.  The home buyer will be able to narrow down their search to a certain price range, and when an offer is made, the seller will take their offer seriously.  Time will not be wasted, since the lender will already have all of the financial information.

To find the best value for one’s money, it is essential to know the maximum amount that can be spent.  Even if one doesn’t want to put out this amount, it is important to know the upper limit.  Financial planning includes not only your current bills and the mortgage payments, but also the costs of buying and owning a home such as down payment, appraisal costs, insurance, escrow fees, property taxes, moving costs and ongoing repairs and maintenance.

Home buying is really an investment.  And because it’s an investment, a person wants to get the best deal possible.  If one is going to buy a home, that person wants to buy something which will provide a boost to their financial situation over the years.   Spending the right amount of money in order to get a better real estate investment will provide benefits for years to come.

Buyer Mistake #2 – The Home Inspection

Make no mistake about it–the home inspection is an absolute necessity.  A new home buyer might be so excited with the home they have found, that they can’t resist just putting up an offer and moving in as fast as they can.  Ever hear that phrase, “Looks can be deceiving?”  One’s home is an extraordinarily large investment, and therefore knowing everything one can about that investment is critical.  Some people may opt to have a home inspection before their offer has been accepted, but this can waste money if the offer fails to go through.  In most situations, the best strategy is to make the offer contingent on the results of the home inspection.

Home inspectors look for things that can’t be easily seen by the buyer, such as the structure of the home, the roof, the electrical wiring, the HVAC systems, the construction, the foundation, and the mechanical systems.  The home inspection will nearly always create a list of problems both big and small.  It is then up to the buyer to decide whether those problems are worth the time and/or expense involved to fix them.

Buyer Mistake #3 – Finding the Wrong Real Estate Agent

It is very important that one take the time to find a real estate agent who is adept at searching for homes, filling out paperwork, and is capable of negotiating with the seller to see that everything closes correctly.  Knowing what questions to ask a potential real estate agent can greatly help narrow down the search.

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