New home buyers are sometimes so excited to be purchasing a house and become so emotionally attached to a house, that they make mistakes, some of which can be costly. It is important to buy with your head, not your heart. Homeownership is an investment and buying with your heart can cause you to spend much more than you’re able to afford. Take a look at these common home buying mistakes and learn what to avoid when looking for your new home.
Overestimating what you can afford. Don’t focus solely on the monthly mortgage and down payment. Interest rates, closing costs, taxes and insurance should be taken into account. It is critical for buyers to know before they start their home search exactly what they can afford, type of financing they will use and the “out of pocket expenses” they incur. Don’t forget to account for costs such as condo or homeowner association fees, if applicable, and maintenance costs. Knowing your true buying power and having a written mortgage pre-approval will strengthen your position when negotiating for a home.
Not planning ahead. Ask your agent about the home’s demand. How many offers have been submitted? How long has it been on the market and are any upgrades necessary? Get a home inspection and be sure that the plumbing, pipes, air conditioning and roof, etc. are in good working order. Also consider purchasing a home warranty for added protection after the sale.
Not getting everything in writing. Assuming that all appliances, fixtures, and window treatments come with the home, and then finding things missing at the final walkthrough could prove to be costly. Be sure that you know exactly what is staying and what is going and get it in writing when making your offer. Your agent can help you decide on items of personal property you want included in your negotiations.
Don’t overpay in order to meet your “wish list” items. Finding a home that has everything on your wish list may make you overly attached and you may end up paying more than you can afford. You don’t want to be house-poor, so make a “need vs want” list and review both with your agent.
Blindly choosing a real estate agent. If you don’t do your research you could end up with someone who doesn’t have your best interests at heart. You want someone who is up-to-date on the current housing market, who has experience negotiating and who won’t pressure you into putting in an offer on a home you’re not entirely comfortable with. Choose an agent who is friendly, accommodating, experienced and who is someone you trust.
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