Unbiased Financial Information Provided by Financial Finesse
Buying a home can be an emotional experience, with hopeful homeowners being excited, nervous, frustrated, and discouraged at various points in the process. All those feelings can cloud your judgment. Being aware of the expensive mistakes other homebuyers have made will improve your chances of averting disaster.
Mistake #1: Not getting preapproved for a mortgage. Preapproval is a commitment from a lender to grant you a mortgage up to a certain amount. By getting preapproved, you'll know exactly what you can afford, and your status will give you more leverage when dealing with agents and sellers. Preapproval also speeds up loan processing once your offer on a home has been accepted.
Mistake #2: Not locking in a low interest rate while you shop. Many lenders will allow homebuyers to secure an interest rate while they look for a home. If the rate drops by the time you're ready to purchase, your lender may give you the lower rate, or at least a small decrease in your higher "locked" rate. The likelihood of getting such a break depends on the individual lender's policies and you making a specific request for the rate reduction.
Mistake #3: Not doing your homework on school districts. If you want your children to attend public school, doing thorough research is critical. Suddenly having to pay for Junior to attend private school because you didn't realize the public schools where you bought your new home weren't up to your standards will take a big bite out of the family budget, so consider the quality of the local school system carefully.
Mistake #4: Not checking out the neighborhood. Scout out general locations before even starting to look at particular properties. Spend some time in the neighborhood at different times of the day. Observe traffic patterns. Talk to as many people as you can -- shopkeepers, residents, police officers. Pester a postman if you must, but be sure to get different perspectives about the place that you might call home.
Mistake #5: Placing too much emphasis on a home's facade and not enough on the interior floor plan. Don't be dazzled by a dynamite exterior. Unless you plan to do a lot of camping in the front yard, consider the floor plan and flow of a house very carefully. Remember that you spend the majority of your time inside, and it's a lot cheaper to paint a house than to gut and remodel one.
Mistake #6: Not anticipating your family's space needs. Are you planning to have more children, or will an elderly relative need to live with you in the future? Buying the right size home now will be cheaper than adding on or remodeling in a few years.
Mistake #7: Skipping the home inspection. Don't even think about it. A thorough inspection can cost you hundreds of dollars -- and save you thousands by alerting you to structural and pest issues as well as potential problems with the foundation, the roof, the plumbing, and the heating and cooling systems. Get solid estimates for any necessary repairs and use them as a bargaining tool when negotiating with the seller.
Mistake #8: Not getting receipts, maintenance records and owner's manuals for appliances and systems. Sure, that Jacuzzi is luxurious, but what happens when the jets lose their juice? Asking the sellers for as much paperwork as they can provide could potentially reduce your repair costs and will help you plan for scheduled maintenance.
Mistake #9: Being impatient in price negotiations. Give your real estate agent time to negotiate the price on used homes. Most homes sell for below asking price, so even if you think you've found the perfect place, be patient. Saving several thousand dollars will make your pick even better.
Mistake #10: Letting your guard down too soon. Of course you're anxious to be done with the hassle of home buying, but it isn't over until you sign on the dotted line. On the day before or the morning of your closing, arrange for a walk-through of the property. Run the water and flush the toilets to ensure that the plumbing and sewer systems are in working order before it becomes your responsibility to repair them!