November 29, 2012 5:38 am
1. Impulse buying. In order to skip this mistake, do some serious research on your specific needs. For example, how do the local schools rate? Are there parks or recreation facilities that fit your needs? Can you tolerate the traffic? Is there sufficient shopping? In other words, rate areas in terms of what is important to you personally. You might find your "dream house" only to discover that resales are terrible, the schools are abysmal, traffic is a nightmare, or that aircraft patterns go right over the front yard. Bottom line – make your dream home earn its stripes. Before you commit to a long term relationship, make certain you are compatible.
2. Not setting any limits. Don't make the classic mistake of buying into more than you can afford. Needless to say, your first responsibility is to pay for your mortgage, taxes, and insurance. If you're set on upgrades or remodeling, can you fit them into your budget? What about furnishings? Can you afford the extra furniture for those extra bedrooms or for that huge new living room? And what about utilities? Those cathedral ceilings are breathtaking, but have you considered the additional energy costs?
3. Not getting pre-approved for a mortgage. Speaking of monthly payments, most experts consider it crucial for buyers to seek pre-approval from a lender before even looking to purchase. While pre-approval does not necessarily mean you are approved for a loan, at the very least it establishes precisely what you can afford. Once you're armed with that information, you can avoid the heartbreak of finding the perfect home only to discover that it's beyond your reach. In addition, pre-approval substantially improves your status as a buyer in the eyes of a seller.
4. Not working with professionals. So, you've found a lender. Now you need to complete your professional support team. Too many buyers believe they can do this on their own, and they disregard professional input. Avoid a nightmare later by assembling a group of professionals who will suit your needs, represent you, and whose expertise you respect. Begin your search with a buyer's agent. Resist the urge to call the number on the For Sale sign. The seller's agent works for the seller. You need an agent who will work on your behalf and negotiate with your interests in mind. Will you need a real estate attorney? It's a good idea to find a suitable lawyer as your search begins, rather than in the midst of it. To say that real estate documents are confusing is an understatement. A real estate attorney is best suited to protect you from unexpected terms or surprises when it's time to sign on the dotted line. And what about a home inspector? Which brings us to the next mistake…
5. Cutting corners on the home inspection. Lenders require a home inspection before they will approve a loan, but the bank generally pays for only standard home inspections that cover structural components such as walls, support, electrical and piping. Buyers are wise to pay for more thorough inspections to include roof integrity, sewage or leaks. A minor investment with your own inspector is a small price to pay in exchange for enormous deficiencies later.
Ultimately, with smart planning and a realistic approach to home buying, you really can enjoy the dream of owning your perfect home.
Published with permission from RISMedia.