Chances are you´d never go shopping for a computer without investigating all the brands on the market and knowing before-hand how much you can afford to spend. Likewise, most people don´t buy a car without test-driving several models. Yet, when it comes to buying a home, many people allow emotion to cloud reason. Buying a home is definitely one of the most important decisions of your life and I want to help you avoid the seven most common and costly mistakes made by homebuyers. If you follow this advice, I believe it will not only save you time, it can also save you thousands of dollars on the purchase of your new home.
Mistake #1: Not getting pre-qualified for a loan before you search for a home. Getting pre-qualified by a professional lender will let you know in advance how much mortgage you can afford. This allows you to make an offer on your home with confidence that funding is available.
Mistake #2: Not being honest with your realtor or lender up front about your credit. Your credit-- whether good, bad, or limited--affects everything from your down payment to interest rates. Your realtor or a professional mortgage consultant can often advise you as to how you can get credit problems cleared up or completely eliminated from your credit report before you apply for financing or make an offer on your home.
Mistake #3: Not negotiating with the owner to provide a home warranty. A home warranty can save you thousands of dollars in repairs and often be obtained for as little as $300.00 for a year. A typical warranty covers the electrical, plumbing, heating and air conditioning systems as well as major home appliances.
Mistake #4: Not requesting a market analysis of the home, in comparison to similar homes in the neighborhood or throughout the city, from your realtor before you make an offer. A home is not just a place to live-it´s an investment in your future. View several homes before you make an offer so you know what´s on the market. Be certain you´re making a wise investment.
Mistake #5: Not inspecting a home before you buy it. Hire a professional to inspect every aspect of the home thoroughly. This can save you thousands of dollars in costly repairs and hundreds of headaches in the future. A thorough inspection can also allow you to negotiate for any repairs prior to closing.
Mistake #6: Not working with a Professional Buyer´s Agent. The agent you are working with does not necessarily work for you. Unless your agent is working as your buyer representative, he or she may be working for the seller. Usually, a buyer agent´s service is free, since their commission is paid by the seller or homebuilder. Be sure to select a real estate professional who has your best interest at heart. Extra tip: Try to select an agent who has earned the national "Accredited Buyer´s Representative" (ABR) designation. These are agents who have extensive experience and training in specifically representing buyers.
Mistake #7: Not taking into account your present homeowner or renter status. If you already own a home and must sell it before you buy a new one, it´s best to get a realtor to do a complete market analysis on your present home. This allows you to know how much you can sell your current home for, before you make an offer on a new one. If you are leasing or renting, the lease´s expiration date will give you a timetable for your purchase.
Mistake #5: Not inspecting a home before you buy it.