Home hunting is exciting, exhausting, and anxiety-provoking, all with good reason. Unfortunately, many people make mistakes that prevent them from reaching their goal. Learn from these tips to avoid making costly errors that could put a hold on that “sold” sign.
NOT KNOWING YOUR BUDGET
Not knowing what you can afford is the wrong way to go into home buying. Even if you can get a mortgage on a place you really should not afford, you will be “house poor” and/or live in great debt for a long time. What the bank says you can afford and what you know you can afford or are comfortable with paying are not necessarily the same.
NOT GETTING A PRE-APPROVED HOME LOAN
Ensure pre-approval for a loan before placing an offer. Your assessment of what you think you can afford and the amount the bank is willing to lend you may not agree. If you don’t get a pre-approval, you’ll be wasting the seller’s time, the agent’s time, and your own time if you enter into a contract and then discover the bank won’t lend you what you need.
DISREGARDING HIDDEN COSTS
Closing costs are a good example of hidden fees, as they usually include several fees that cover final housekeeping matters. Once you’re a homeowner, you’ll have additional expenses on top of your monthly payment. Before signing the home buyer’s agreement, it would be wise on your part to ferret out any and all hidden fees and incorporate them into your budget.
DISREGARDING LOCAL HOUSING MARKET TRENDS
It is important that you consider how the housing market changes in your ideal location, as home prices vary from one location to another. Stay alert to comparable sales (comps) in the area. If they sell for below listing price, it is a buyers’ market. If they sell above listing price, it is a seller’s market.
NOT BEING REPRESENTED BY A BUYER’S AGENT
You can browse without an agent, but once you are considering seriously looking at a house, engage a real estate agent. Do not rely on the seller’s agent to represent you. The listing agent is the seller’s representative and has the seller’s interest in mind. A buyer’s agent is paid from a commission that is spit with the seller’s agent. All-in-all, it is pointlessly risky to negotiate conditions and sale price without proper professional representation on your side.
COMPROMISING ON YOUR NEEDS
While compromises in meeting your dream-home desires are necessary in a first-home purchase, do not compromise on your needs. You can do without the living room fireplace or swimming pool; however, don’t accept a two-bedroom home when you are planning to have children and will need three bedrooms. On the other hand, use your vision. If the home meets your needs in the location and size, don’t let lesser physical imperfections overpower your perspective.
RELYING ON ONLINE SERVICES ONLY
Now that many real estate transaction services are obtainable at the click of the mouse, many people have become too dependent on them. While it is true that loans an be obtained online and houses can be bought as well, failure to establish personal touch with lenders or home sellers could present costly misunderstandings in future or put you at a bargaining disadvantage. It might feel more convenient and less stressful to go through as much of the process as possible online, but you may well find you’ve simply saved up far more stress and inconvenience for later. In the end, it’s better to simply take the plunge at the outset and handle things in person when you can.
Avoiding these mistakes can help you make the right choices when it comes to finding a home you and your family can take pride in. Keep in mind, also, that if and when the time comes, the resale value will be a great help to avoid problems moving on in the future.