Buying a house covers a lot of ground including legal, financial and
emotional considerations. To not educate yourself and learn from the
mistakes of others only sets you up to be at best disappointed and at
worst finding yourself living in the wrong house. We have listed some of
the most prevalent and potentially dangerous and expensive mistakes
made by first time home buyers.
Running Before Walking This is easy to do once the
decision to buy a home has been made. It means rushing off looking at
homes, surfing the web or calling on advertisements before doing some
up-front preparation. Not spending time doing this preparation, though,
can be a disaster. We get a number of emails from buyers who have
contracted to purchase a home and want to know the easiest way of
getting out of the purchase. Let it be known loud and clear: If you
contract to purchase a home and "change your mind," the chances of
getting released from the contract are almost non-existent. Still we
hear "We found another home!" Sorry, too late. Maybe next time. "We are
buying too much house!" Okay, maybe you will be able to rent out a room
or two. “It’s not what we want!" Maybe you can paint the house, or add
on to it or replace the carpeting, but you will almost certainly be
living in it!
Over-Buying the First Time Being "house poor" is a
very uncomfortable existence. A large and beautiful home with little or
no furniture tends to be empty and cold. A life where almost every dime
of your earnings goes to the support of your house wears thin very
quickly and is a frequent cause of family stress. Pushing yourself right
up to--or beyond--your limits leaves you highly exposed when the
inevitable changes to the national or your personal economy occur. Leave
yourself some breathing room!
Finding Out Too Late That You Have NO Representation
This can be a real nasty surprise when you assume that the Agent with
whom you are working represents you when they actually represent--and
owe complete allegiance to--the seller. How does this happen? By not
taking the time to investigate and familiarize yourself with the laws
regarding Agency. Or, by rushing out to look at homes, whether in person
or on the Internet, and contacting the Agent who has the house
advertised (who will be the listing Agent and will absolutely represent
the seller). Another pitfall occurs when you try to represent yourself
in the purchase of a home, thinking that you will save money. This may
be the case, but it is just as--or more--likely that you will run into a
savvy seller who is looking to keep the commission savings in their
pocket rather than give it to you. In addition, without representation
and the use of a Comparative Market Analysis, how do you determine a
realistic selling price for a property?
Not Getting Mortgage Pre-approval In the past it may
have been different, but in the year 2003, prequalification and
pre-approvals are a necessary part of the home buying process. Not only
will it give you an exact price range for your purchase, pre-approval
will add a great deal of strength to your offer. See the pages devoted
to the subjects of prequalification and pre-approval.
Waiting for the "Perfect" Home Many first time
buyers make the mistake that they will, if they look around long enough,
find a home that has a full 100% of their needs and wants. With the
thousands of variables available in housing, including location, style,
size, amenities and condition, this is almost always an unrealistic
goal. There are two potential problems with this strategy: First, these
buyers pass by homes that meet 90% or more of their requirements only to
eventually give up (often purchasing homes with less of their
requirements because they are worn out!) and second, while they are
waiting for the "perfect" home, housing market prices (and often
mortgage rates) continue to rise, adding expense to their purchase.
Instead, it makes sense to determine the most important of your needs
and the most desired of your wants and selecting a home that meets the
majority of them. Shortcutting the inspection process. This can involve
skipping a whole house inspection completely in order to save the
relatively small amount of money involved or it may involve using a
friend or relative with limited experience to conduct the inspection. In
either case you run the risk of not exposing potentially expensive--or
even hazardous--defects in the property. Protect yourself and invest the
$200 to $500 for a professional inspection.