Home Buying Mistake #1 – Not Getting Pre-approved for a Loan
Not getting pre-approved for a loan is by far the biggest mistake a buyer could make. It should be the first thing you do if you’re serious about buying a home
A pre-approval will prevent you from looking at homes you can’t afford and put you in a strong negotiating position for making an offer.
Start shopping around for a lender with the best mortgage rates and get all your paperwork together. Once you’ve found a lender you like get them to give you a pre-approval.
Home Buying Mistake #2 – Not Using a Qualified Real Estate Agent
Ask friends and family members for references and talk to a few agents before choosing the right realtor who you would like to work with.
By using a broker or agent you are getting an ally and negotiator for free. You are using all the knowledge and skills without paying for it.
Home Buying Mistake #3 – Not Getting a Thorough Inspection
The inspection is a critical point in the home buying process. It’s when you will get a real look at what a home is made of, literally. It’s also gives the buyer the power to walk away from a contract if the home isn’t exactly what they expected and to re-negotiate. Yet, many buyers are so excited to have found a home and signed a contract that they don’t do their due diligence and get a thorough inspection. If the inspection period has passed, your best bet is to get a good home warranty which will cover some of the issues that may arise.
Home Buying Mistake #4 – Not Reading & Understanding Contracts Thoroughly
Real estate contracts can be complex and it’s a huge financial obligation that you’re entering into when you sign a contract. An agent can explain different parts of the contract to you but that doesn’t mean you should read every line and ask questions. You should know what each portion pertains to, how it will affect negotiations. and how it’s going to affect your purchasing and ownership of the home.
Not reading and understanding a contract thoroughly is a mistake that can get buyers into the most trouble. Unfortunately, most contracts are binding and it’s your responsibility to make sure that everything is accurate and to your liking before you sign. Try to discuss any issues with the other party to see if they are willing to rework the contract.
Home Buying Mistake #5 – Buying at the Top of Their Price Range
It pays to be conservative when you’re shopping for a home. Use your pre-approval amount as a measure for what would max your finances out. Explain to your agent that you aren’t comfortable being maxed out and to not show you houses that are at the pre-approval amount.
If you already own a home that is making you ‘house poor’ see what you can do to refinance. With rates as low as they are today refinancing could make a huge difference.