Top 10 Mistakes When Buying a Home
Buying a home can be as stressful as divorce or bankruptcy, according to some scholarly studies. It makes sense: Purchasing a home is often the biggest investment anyone will make in a lifetime. Committing to such a large sum takes fortitude, planning, and research. Unfortunately, some homebuyers fail to consider the common traps that can snare those who are unprepared. Often, the costs lead to financial and psychological stress. Consider the top 10 mistakes when buying a home:
- Going it alone. Surprisingly, some people try to buy a home without a qualified agent. This is like climbing an unfamiliar mountain without a guide or a map. You need someone who can help you analyze the market, find the right home for you and advise you on a successful offer.
- Picking the wrong agent. You need to be objective when selecting an agent to represent you. A family friend or acquaintance may be unfamiliar with the neighborhood you’re targeting. Worse, they may not have the experience necessary to guide through the increasingly complex regulations governing home sales.
- Waiving the home inspection. No matter how desirable a house may look, you don’t know what problems might be lurking inside. A home inspection can protect you against unpleasant surprises later. Even in a hot seller’s market, it’s never a good idea to waive the home inspection as part of your offer.
- Submitting a lowball offer. You can make an offer that’s way lower than the asking price, but you’re taking a big risk that the owner will be offended and won’t reconsider another bid. A lowball offer can be insulting and may be a waste of your time, so give serious consideration to making a reasonable offer.
- Removing loan contingencies. In a seller’s market, some buyers remove the loan contingency from their offer. But if the buyer can’t get the financing to buy the home, they may lose their earnest money. If you’re borrowing money from a financial institution to buy a house, it’s always a good idea to make the purchase contingent upon getting the loan.
- Borrowing more than you can afford. Some buyers fall in love with a home so much that they’ll borrow more than they can afford. As the last housing crisis revealed, doing so can put your family at great financial risk.
- Not shopping for loans. The business of banking is highly competitive, so use that to your advantage to shop for a home loan. You may be surprised how much you can save. A fraction of a percentage point on a home loan may not seem like much but it translates to thousands of dollars of savings over the life of a 30-year mortgage.
- Forgetting closing costs. Figure out who will pay the closing costs for buying a home. It varies depending on the location, so be sure to familiarize yourself with what is customarily the buyer’s costs such as fees for appraisals, pest inspections, and other expenses.
- Shopping for homeowner’s insurance. Like banking, the insurance market is competitive. Insurance agents want your business and you may be eligible for discounts if you also include car insurance in a package deal.
- Failing to research the neighborhood. Speak with prospective neighbors, research police data and analyze school results for an indication of your neighborhood’s appeal. These are the kinds of factors that affect property prices and can add or subtract value.
Premiere Plus Realty has a winning team of agents who can help you avoid home buying mistakes. Visit http://premiereplusrealty.com/ or call us at 239-732-7837 in Collier County or 239-206-2777 in Lee County.
April 03, 2018
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