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Mistakes to Avoid When Buying a Home

April 2, 2014

A representation of achievement and a symbol of the American Dream, purchasing a home is considered one of the largest financial decisions and obligations one will encounter in their lives.  However, eager to move into their dream home and begin the next chapter of life, even seasoned buyers can let the excitement and chaos cloud their judgment.  If crucial components are not executed properly or neglected altogether, you invite a number of complications to the transaction that are not only detrimental to the outcome, but can also negatively impact you for years to come.

Avoid these common mistakes to facilitate the process, protect your investment, eliminate unnecessary stress, and secure a favorable outcome.

 

Neglecting to Hire a Professional

Buying a home is a complex and tedious process, and a major financial investment, so it is crucial to work with the appropriate professionals.  Opting to forgo a Realtor, Mortgage Professional, Licensed Home Inspectors, and Licensed Title Agencies, etc, can result in higher costs and unnecessary worry.  A Realtor connects you to the right professionals and guides you through the process so that you can execute the proper steps and enjoy the most favorable outcome.

 

Starting Without a Plan: 

When buying a home, it is imperative that the entire process is a thought out plan so that you can remain organized and in control.  Know the type of home you are looking for, the area(s) you are interested in living, who is going to help you, and what steps you will need to execute.  Without a realistic idea of these essential components, you may encounter a number of difficulties.

 

Not Getting Pre-Approved: 

Obtaining pre approval should be a top priority when starting the home buying process.  Buyers need to know where their credit stands and how much they can afford.  Also, being pre approved will strengthen your offer when you submit one, and it will secure your interest rate to protect yourself from increasing rates.

 

Expecting to Find a Home with Everything on Your Wish List: 

There will most likely be some non-negotiable features that you consider essential elements in your new home.  However, it is difficult to find a home that encompasses every single component desired.  Make a list that ranks the most important qualities to the least important, and keep your options open.

 

Unfamiliarity with the Neighborhood or Area

Location is everything in real estate!  Buyers need to search for homes in an area that possesses the best location and amenities that accommodate their family’s lifestyle.  Then, understand the neighborhood you are considering moving into.  Consider Home Owners Associations, dues, and restrictions.  Inquire about the neighborhood’s amenities and property taxes, and evaluate its proximity to schools and activities.  Visit neighborhoods during various times during the day and week to get an accurate portrayal of it prior to narrowing down your choices.

 

Limiting Your Search Options: 

While you can find a lot of information about a home online through various websites, the information can be limited or expired.  Take advantage of every platform available to you so you don’t miss out.  If you use a Realtor, you will have access to the MLS, and can possibly benefit from their industry connections.

 

Exceeding Your Budget: 

You need to have a realistic concept of your budget and what you can afford.  Don’t convince or allow yourself to exceed that budget.  Again, working with the right professionals will help you avoid this mistake.

 

Failing to Evaluate Hidden Costs and the Importance of a Home Warranty:

Homes require a certain amount of maintenance and repair work, which can often be costly and stressful.  Factor in these unexpected occurrences, and prepare by saving extra money to accommodate.  Make sure to buy a home with a warranty to avoid some costly repairs, as well.  If it doesn’t include a warranty, your Realtor can request that the seller provides one during negotiation.  In addition, factor in other costs, including property taxes, HOA dues, and other applicable fees that accompany the neighborhood. 

 

Not Obtaining a Comparative Market Analysis or Considering the Resale Value of the Home: 

Buyers need to have an idea the property’s market value prior to submitting an offer to avoid over paying.  Obtaining a Comparative Market Analysis will show comparable properties in the area, their sale price, and recent price trends.  If you pay too much, you are likely to lose on the investment when it is time to sell.  Purchasing a home for the right price and employing the right professionals will help protect you and your investment.

 

Disregarding the Importance of a Home Inspection: 

Avoid major costs down the road by obtaining a home inspection by a licensed, reputable provider.  Any recommended repairs should be completed by a licensed contractor.  Then, the home should be re-inspected before closing.

 

Purchasing an Expensive Item Prior to Closing: 

Credit requirements for loans have become strict.  If you need to buy furniture or appliances for your home, a new car, or other costly items, wait until after the house closes, as financing these expensive items can affect the closing.  Work with a credible mortgage broker to avoid jeopardizing the closing.

 

Home buyers who avoid making these mistakes will undoubtedly reduce the risk of complications or financial strain down the road; however, buying a home is still an overwhelming time.  It is imperative that buyers find a professional real estate agent who will guide them through the process, facilitate every facet of the transaction, and provide assurance that each step is executed properly, efficiently, and in the client’s best interest!

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