Top 10 Home Buying Mistakes
When buying a home, you can easily avoid making common mistakes if you do your homework and properly prepare for this major purchase. To help you avoid the most common home buying mistakes ForeclosedHomes.com has compiled a list of the top Ten.
Looking without being pre-approved
More people make this mistake when buying a home than you may think. If you’re looking at homes without being pre-approved for a mortgage, the seller will not take you seriously. Being pre-approved for a loan is important for a potential homebuyer because it helps ensure that the buyer is in a financial position to purchase a property, and it places the buyer in the strongest possible position to negotiate with the seller of the property. When a potential homebuyer already has pre-approved financing in-hand, negotiations with both the seller and the lender go much smoother. Pre-approval gives the homebuyer a concrete idea of what they can afford and shows the seller that they are serious about buying a home.Not making a monthly budget
Not knowing your monthly budget before you buy could cost you your home. Do not rely on your mortgage broker or loan officer they will tell you how much you can borrow not how much you can afford. Be sure to examine all of your monthly expenditures and know exactly how much you spend in a month. This will help you figure out how much extra you can afford monthly. According to the experts, your monthly debts including your mortgage should never exceed 36 percent of your income before taxes.Failing to comparison shop before you buy
It’s always a good idea to know what similar homes in the area are selling for before you agree on a price with the seller. If you have a realtor ask her to provide you with a Comparable Market Analysis or CMA before you make an offer on the home. The CMA includes the address, price, number of bedrooms and baths, and other pertinent information on homes recently sold in the surrounding area and will help you decide how much to offer for the home.Trusting a bad real estate agent
Trusting an unscrupulous real estate agent could cost you a bundle of money in all sorts of ways. Always interview several before selecting one. Be sure to look for a buyer’s agent who will work for you and understands what your needs are and your financial limitations.Failing to check the property at different times of the day
If you’re interested in a property, check it out at different times of the day and pay attention to traffic and noise levels, etc.Picking the wrong type of mortgage
There are a wide range of different types of mortgages out there. Do your homework to discover the differences and then select the best one for your situation.Not having the home inspected
Trying to save a few bucks by not having the home inspected before buying could be a very costly home buying mistake. An inspector’s practiced eye could catch a major flaw that you missed!Forgetting about closing costs
Closing costs typically range around two to five percent of the purchase price, so make sure to set aside some of your money unless you have arranged for the seller to cover closing costs.Buying more home than you can afford
Being ‘house poor’ is an old expression but a common home buying mistake for people who let their emotions influence their buying decisions. Making a monthly budget is an easy way to avoid this home buying mistake and the inevitable buyer’s remorse that accompanies it.Addressing wants before needs
Sit down and make a list of what you need in a home and the amenities you’d like the home to have. When home shopping, it’s OK to indulge a few ‘wants’ as long as the home also meets most or all of your ‘needs.’
These are only ten of the countless home buying mistakes that people make when they are caught up in the excitement of buying a home. This is a decision that you definitely want to get right the first time so take your time, do your homework, prepare properly, and you can avoid these and other mistakes when buying a house.