Don’t Make These Costly House Hunting Mistakes
Patience and research can save you money when shopping for a home.
You’re shopping for a new home, wanting to take advantage of historically low mortgage rates and rock bottom home prices. As a first-time or transitional home buyer, you stand to come away with a deal that can save you tens of thousands of dollars. You’re also vulnerable to making some costly mistakes, errors that can erase some of the gains you can make.
Read on for a look at costly house hunting mistakes and how to avoid them:
1. Avoid emotional attachment — Falling in love with a home can blind you to problems ranging from home repairs that need to be made to a neighborhood that is in decline. When you’re emotionally attached to a home, you’ll find it more difficult to walk away. Be dispassionate when negotiating for a home — fall in love with it only after you have done your homework and have sealed a deal.
2. Know your limitspre-approval, you may search for homes outside of your price range, wasting time shopping for a home that you simply cannot afford. Time is money — narrow your search and shop within the range you can afford.
3. Search and compare — You may know the home that you want, but you will only understand your local market if you know what competing homes are like and what these homes are selling for. Look at at least four or five other homes before settling on the one you want to buy. This will allow you to find out how your home measures up and if you’re paying the right price for it.
4. Inspection ignorance — If you are buying a home and an inspection is required by the mortgage company, that is a good thing. However, even an inspection may not turn up everything about your home. Hire an inspector that knows his stuff, an individual who comes recommended and will give you a detailed report with his recommendations. Your home may pass inspection, but there could be underlying problems that may crop up and cost you a few years down the road. Pay for that radon test and resolve home problems before closing. Review the home inspection report carefully.
5. No agent involved — People buy and sell homes all the time without the input of a real estate agent. While this option may work out for the seller, it can be a big problem for the buyer. A knowledgeable real estate agent knows the home, the neighborhood and can answer questions that go beyond the research you need to do. A real estate agent can also oversee the closing process, ensuring that the inspection has been completed, that the attorney review has been accomplished and that you’re ready for closing. Too much can fall through the cracks without a professional overseeing the lengthy and complicated home-buying process.
You don’t want to pay too much money for a home, right? You also don’t want to uncover secret costs later on including an unforeseen property tax increase, a road expansion that will gobble up part of your front lawn or a nearby natural area that will be paved over to expand a large retailer’s parking lot. Be thorough in your research and you’ll uncover much, giving you the information you need to make an informed buying decision for your investment.