Mistakes to avoid when buying a home - When shopping for your new home there are many things that you can do wrong. Some of these mistakes can cost you the home you wanted to buy your money or both. Some of the more common mistakes are but not limited to the following.
Not getting your interest rate lock in writing. When your mortgage broker locks your interest rate he/she should supply you with a letter that states your interest rate and how long it is locked for. Do not take the word of your mortgage broker that your rate has been locked. Always ask for a rate lock letter
Before even looking at homes, make a list of things that you MUST have in your home, be it size, rooms, location, amenities, etc. Then, use that checklist when looking at homes. Be patient and don't make compromises you may regret later.
Many people shop for a home prior to shopping for a mortgage. Often times they will fall in love with a house they ultimatly can't afford. By speaking to a mortgage professional first you will get a concise window of what price you can realistically afford. Getting pre-approved is the best way to let Realtors and sellers know you are serious about your purchase. Generally, they will then take your offers much more seriously.
You should always get a second opinion on the house condition from a licensed and certified property inspector who can tell you what is wrong with the house or what items will need to be repaired so you can negotiate for repair costs from the sellers.
If you find a home you like, make sure you take a look at it more than once and at different times if possible. Try and get a feel for the day to day things you don't always think about. There might not be any traffic on a Sunday afternoon, but morning rush traffic might be horrible, or the bus stop might not be in a convenient location.
When buying a home make sure that you do not buy too expensive of a home. Even though you may qualify for a large mortgage this does not mean you need to buy a home at the maximum amount you are approved for. Along with a bigger home, come larger utiltiy bills, larger maintenance bills and more time required for the upkeep of your home and yard. Many people like to buy homes above their means and then end up needing to downsize later.
Rushing into a home can be a big problem. Get prequalified and don't shoot for the max, take your time and look at many houses, as you will probably be in it for a long time to come!
Mistakes to avoid when buying a home - If you are in the market to purchase a home, there are many mistakes and pitfalls that one should avoid to save themselves the most money, time, and heartache.
Not reading your purchase agreement thoroughly is a very common mistake when buying a home especially for first time home-buyers. When you are buying a home make sure that you read through the purchase contract line by line. Do not just take someones word for it that everything is very basic and standard. It is a very good idea to have your purchase contract reviewed by someone else as well to make sure that everything looks good. An attorney, a mortgage professional or if you have a friend in the real estate market, these would be good people to contact to see if they will assist with reviewing the contract for you.
Don't buy more than you can afford. Often times borrowers may try to buy more home than they can afford and take longer than needed loan program or interest only to get their particular home.
A common mistake to avoid when buying a home is allowing someone to talk you into a home that needs work. This work could be lanscaping, finishing the basement, adding a deck, replacing carpet, repainting, etc. If you don't have the skill to do it youself, the funds to have it done soon, or the time to get it done, you may find these projects getting put off for years.
For example, instead of buying a home with an unfinished basement that never gets finished, you may be much happier with a slightly smaller home with a finished basement.
Anything you don't do regularly, you will be weak at...How do you be the best you can at something you don't do regularly, right, seek help...Who do you ask?...The people that do it everyday, well, yes and no...Yes for the obvious reasons, no because they know how to make money at what they do and that usually conflicts with your goal as a consumer...Seek people that have just gone thru the process you're getting ready to go thru and pick their brains...It's always better to learn from someone else's mistakes...
One primary concern to nearly all homeowners is the quality of the neighborhood schools. A potential homebuyer would be wise to research the school quality when considering purchasing a particular home even if they do not have school age children. Homes located in neighborhoods with high quality public schools increase in value and retain their value much better than ones in neighborhoods where the school quality is lower. Even if you are not concerned with the quality of schools the next person that buys your home probably will be.
Avoiding mistakes when buying a home - Getting a loan from your real estate agent or the mortgage company in the real estate agents office may not save you any money. It has been my experience that some realtors are not educated on the financial side of purchases and could ultimately hurt the borrower in the long run. It could also be a lot more expensive. Competition drives down rates and closing costs, using your realtor eliminates that competition.
Because your home is the largest investment you will probably make, the emotional roller coaster you will experience is natural. An important step would be to involve yourself with a team of real estate and mortgage professionals who will undeniably work on your behalf.
Often times people buy to much of a home, and they end up falling behind on the payments. Be sure that you can afford and are comfortable with what your mortgage payments will be, before you take control of the house. If you already own the home, and are having trouble making the payments, then there are certain ways to refinance and alleviate some of your mortgage burden.
One big mistake is trying to buy a home without first being pre approved for financing by a mortgage broker. Without pre approval your offer is weaker and will often times be turned down by the sellers.
Make sure that you compare what other homes that are comparable to the one you are buying have sold for. You realtor should be able to provide you with this information.
Ask about who, or what title company, will be doing the closing for your loan. Ask if you can get a list of their fees upfront because many times your mortgage broker will be able to have one of their title companies that they use often, meet or beat the costs of the realtor's preferred title company. You can usually request to use a certain title company in your purchase agreement and as long as the seller agrees to it, everything is fine.
One major mistake is not getting your home inspected. Hire a good, experienced home inspector. You and your real estate agent may not know how to inspect a roof or a furnace or a foundation or check for mold.
Ask the seller to pay for a home warranty. It only costs a few hundred dollars to warranty that the house is in the condition the seller says it is.
Many people make the mistake of getting emotionally attached to a home they realistically cannot afford. One way to prevent this is to speak with your preferred mortgage professional prior to shopping for a home. This way you will know your price range and be ready to make an strong offer when you find the right place.
The biggest mistake any of my borrowers have made is being afraid to walk away from a deal or the negotiations. If you find a house you love but you are having problems with negotiations, or the buyer's real estate agent, or getting problems found in the home inspection rectified, don't be afraid to walk away. It might be just the tip of the iceberg, and once you are in the home it is too late. There will always be more homes for sale.
A big mistake to avoid when looking to buy a home is make sure that you read your purchase agreement in full. Pay attention to all of the details listed on the purchase agreement. Pay attention especially to the dates listed on there. If you sign a purchase agreement stating you have to close on the loan by a certain date but you will not get your keys for 2 weeks after that date and you are selling you own home and have to be out of your house before you are able to get your keys, this could cause major problems. Timing is a key element in a buy-sell transaction for all parties involved. Timing affect yourself and the buyers of your home, the sellers of the home you are buying and the seller of the home they are buying, and so on down the road. Proof read your purchase contract before signing and if possible you may even want to consider having an attorney look it over for you. The purchase agreement is a legally binding agreement for a large investment. You can lose your earnest money if you back out of the purchase agreement for a reason that is not acceptable to your contract. Ask your Realtor what ways you can get out of the purchase agreement and if they can show you where it states that on the purchase agreement. The purchase agreement should be contingent upon receiving a satisfactory appraisal of the home for a value that is at least equal to the purchase price. So don't be afraid to ask questions or ask a professional for help.
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