Category Archives: new home buying tips

6 Common Mistakes Home Buyers Make

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key words sale home property and how to avoid home buyer mistakesThere’s a lot on the line when a home buyer looks for a new home: finances, emotions, having a roof over your head. If you’re like most home buyers, you’re looking for more than just a roof over your head when making  the biggest purchase of your life: your home purchase. You have must-haves for your home purchase, like a big yard (or no yard), deck, prime location—or maybe it’s a small must-have like the counter top material.

Ignoring the finance preparation

To get the best mortgage rate, and to make sure you have all financial ducks in a row, start preparing your finances for your purchase before you make the home purchase. Small steps, like knowing your credit score, lessening your debt load, and saving up for a down payment can make your transaction smoother and easier before and after your purchase.

Getting in over your head

Speaking of after your purchase, don’t overextend yourself when buying a home. Make a detailed budget of expenses (both present, future and unexpected), and choose a payment that fits within your budget. Don’t assume that you can take on more debt load or that your current debts are going to decrease in the future. If you are buying a fixer upper, have a clear idea of the cost to remodel your home—and if you have the funds to do it.

Not having an approved budget when you start your home search

dollar sign to get ready for buying a homeWhile those online mortgage calculators can seem very handy when setting your budget, only a lender can give you a final approved budget for your home search. Choose your lender carefully (we’ve given you tips to help you select the right lender in our recent post) and start compiling documents for your pre-approval such as past tax returns, pay stubs, and bank account statements. The exact documents your lender requests is dependent upon your financial situation, but the hassles of gathering a few documents is worth it so you have a set idea of how much house you can afford in your home purchase.

Trusting the biggest purchase of your life to a friend-of-a-friend

A good real estate agent is invaluable during a real estate purchase. Not only can an experienced, local agent help you find homes in an ideal location, but they can help you spot red flags, give you advice that could make or break your deal, and negotiate a fair price for your new home. For all those reasons (and thousands of dollars more), contact a real estate agent that matches all these criteria.

Falling in love with a house before the home inspection

Proceed with caution, especially if you don’t have room in your budget to make thousands of dollars of repairs. Don’t let your emotions get the best of you, so you overlook any issues with a potential home that could bankrupt you. Hire an experienced home inspector to inspect your new home, and base your final home purchase decision on their report. Even a house that looks beautiful can have hidden issues that could cost you thousands later.

Being unrealistic

Homes cost money, so don’t expect to get everything for nothing. Many first-time buyers want to check off all the boxes on their must have list for nothing, or think that they can low ball home sellers to get a deal during their home purchase. The fair selling price of a home is determined by comparable home sales in the area, and not by what you want to pay. How do you know what that price is? Just ask your real estate agent for a full analysis of local sales.  They’ll help you determine a fair price and guide you through your home purchase without making common home buyer mistakes.