- Not previewing the neighborhood
Location, Location, Location! As you preview your prospective home, consider its surroundings. What stores are in the area? Do you need access to a nearby school or medical facility? Have you seen how your prospective neighbors behave during the day? On the weekends? Is this area in a convenient location for your work and/or your commute to and from work? These factors will also affect your property values, so consider them when researching a neighborhood to protect your investment.
- Not investigating a fixer-upper or foreclosed house
Before being sold on the relatively inexpensive price of a fixer-upper or a foreclosed house, consider the secondary costs that the repair or finishing touches will require. Can you live in a house while it’s being renovated? Can you handle the stress of completing repairs in between work or other obligations? Getting estimates on repairs before you buy can be very helpful for planning your purchase.
- Not inspecting the house
A bright, shiny surface can hide very serious issues beneath. It might have fresh paint and new carpets, but are those just covering mold damage? Do all of the outlets have power? Are the doors and windows sealed preventing pests from entering and temperature controlled air from leaving? A professional inspection will help ensure you get the whole story on your prospective home.
- Falling in love with the first house you see
Falling in love with your dream home may be your goal when buying a home, but make sure it’s actually your dream home and not a house you are making excuses for or one where you are overlooking serious flaws. Don’t settle for less than the best, shopping around will give you prospective on your investment in your home.
- Not planning long-term
Buying a small home may be inexpensive in the short term, but are you planning on expanding your family? Do you want pets, a pool or several vehicles in the future? A large house that your family is planning on growing into will be a much better investment in the long term. Storage, swimming pools, landscaping and other additions will raise the value of your home, and a large house will be better able to accommodate those improvements.
- Buying outside of your price range
Qualifying for a large loan doesn’t mean you have to buy a home for that price. Take into account your monthly payments on the loan, in addition to your taxes and utilities. Sticking to your monthly budget will protect your credit rating in the long run, giving you access to an even larger loan amount as your investment matures.
- Not reading your contract
If you sign it, you are responsible for it. Retaining the services of a real estate attorney can be really helpful as you process your loan terms, and above all else make sure you take the time to know what you are signing.
- Not planning for contingencies
Human error can never be factored out of any transaction; don’t let yourself be the victim of someone else’s mistake. Putting in a reasonable option to cancelling the home buying transaction will save you thousands of dollars in legal fees and will protect the bank, leaving you on much better terms to resolve the conflict.
- Trying to time the market
Housing values are sensitive to many different conditions, so timing the market takes a tremendous amount of knowledge and in most cases luck. As long as you’ve done your research on the area you live in and have planned and followed your budget, it’s the perfect time to buy!
- Not being pre-approved for a loan
Starting your home buying process by going to a lender or broker you trust can help you become familiar with the home buying process and will give you experience for dealing with future transactions. Additionally, after being pre-approved you can better plan your budget and have a better idea of what price range you can shop in. This investment in yourself will pay off in an easier and more enjoyable home buying process.