| Buying a House: Mistakes to Avoid |
Buying a house covers a lot of ground
- including legal, financial and emotional considerations. To
not educate yourself and learn from the mistakes of others only
sets you up to be at best disappointed and at worst finding yourself
living in the wrong house. Listed here are some of the most prevalent
- and potentially dangerous and expensive - mistakes made by first-time
home buyers.
Running before walking
This is easy to do once the decision to buy a home has been
made. It means rushing off looking at homes, surfing the web or
calling on advertisements before doing some up-front preparation.
Not spending time doing this preparation, though, can be a disaster.
If you contract to purchase
a home and "change your mind", the chances of getting
released from the contract are almost non-existent.
Over-buying the first time
Being "house poor" is an uncomfortable existence.
A large and beautiful home with little or no furniture tends to
be empty and cold. A life where almost every dime of your earnings
goes to support your house wears thin very quickly and is a frequent
cause of family stress. Pushing yourself right up to - or beyond
- your limits leaves you highly exposed when the inevitable changes
to the national or your personal economy occur. Leave yourself
some breathing room!
Finding out too late that you have no representation
This can be a nasty surprise when you assume that the Agent
with whom you are working represents you when they actually represent
- and owe complete allegiance to - the seller. How does this happen?
By not taking the time to investigate and familiarize yourself
with the laws regarding Agency. Or, by rushing out to look at
homes, whether in person or on the Internet, and contacting the
Agent who has the house advertised (who will be the listing Agent
and will absolutely represent the seller). Another pitfall occurs
when you try to represent yourself in the purchase of a home,
thinking that you will save money. This may be the case, but it
is just as - or more - likely that you will run into a savvy seller
who is looking to keep the commission savings in their pocket
rather than give it to you. In addition, without representation
and the use of a Comparative Market Analysis, how do you determine
a realistic selling price for a property?
Not getting mortgage preapproval
In the past it may have been different, but today prequalification
and preapprovals are a necessary part of the home buying process.
Not only will it give you an exact price range for your purchase,
preapproval will add a great deal of strength to your offer.
Waiting for the "perfect" home
Many first time buyers make the mistake of thinking that they
will, if they look around long enough, find a home that meets
100% of their needs and wants. With the thousands of variables
available in housing, including location, style, size, amenities
and condition, this is almost always an unrealistic goal. There
are two potential problems with this strategy: First, these buyers
pass by homes that meet 90% or more of their requirements only
to eventually give up (often purchasing homes that meet fewer
of their requirements because they are worn out!). Second, while
they are waiting for the "perfect" home, housing market
prices (and often mortgage rates) continue to rise, adding expense
to their purchase. Instead, it makes sense to determine the most
important of your needs and the most desired of your wants, then
select a home that meets the majority of them.
Shortcutting the house inspection process
This can involve skipping a whole house inspection completely
in order to save the relatively small cost involved or it may
involve using a friend or relative with limited experience to
conduct the inspection. In either case you run the risk of overlooking
potentially expensive - or even hazardous - defects in the property.
Protect yourself and invest the $200 to $500 for a professional
inspection.
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