With a little preparation, finding and purchasing your home can be a positive experience. But, if you stumble into some common pitfalls, the process can turn into a nightmare. This special report will help you avoid seven common mistakes buyers make.
1. Pleading financial ignorance
A little preparation goes a long way. Be a smart consumer. Learn financing basics before you start shopping. Explore your options. Ask questions. Know how to shop for a home loan that’s right for you.
And it’s always a good idea to get pre-approved by a lending institution. This simple step takes very little time and lets you know the price range that fits your lifestyle.
2. Buying on impulse
The last thing you need is to close a deal and realize you bought a house you don't want or like. Ask yourself what you're looking for in a home, before you shop. Think about size, commute time and necessary repairs.
3. Running up high debt
Don't make major purchases until after you buy your home. Pay down credit cards and don't apply for new ones. Remember, financial institutions evaluate your financial situation on your gross monthly income. Your total monthly house costs shouldn’t exceed 28 percent of your gross monthly income.
4. Taking too much time
Sometimes homes sell quickly, so be ready to make fast decisions (this is why you prepare before you start your search). Be accessible to change terms and have easy access to your agent. Instant communication can mean the difference in purchasing the property of your choice.
5. Submitting a weak offer
Sellers want a fair price, and they want to know a potential buyer is serious. Submit a strong offer and include a substantial earnest money deposit. Sometimes offers are accepted based on the amount of the deposit.
6. Being too picky
Fewer contingencies mean a stronger offer.
7. Neglecting the homework
Skipping a few easy steps in the buying process can be disastrous in the long run. Make sure you know what you’re getting – before you buy.
- Hire a professional building inspector or appraiser. Make sure the house is in satisfactory condition.
- Check zoning regulations and covenants. Good residential neighborhoods are zoned to keep out commercial and industrial users. Read any restrictive covenants; make sure they fit your lifestyle.
- Request an updated property survey. Be sure it clearly marks boundaries. Check for problems.
- Make sure you know what stays or goes.
- Your contract should be very specific about which items (appliances, etc.) are included in the sale.
- Get agreements in writing. Make certain verbal agreements are written into the final contract to avoid any stressful and expensive issues later.