Ten Mistakes People Make When Buying a Home
We get it — buying a home is tough. Finding the right house, the right neighborhood and the right price are big decisions. Add in the financial and legal aspects — not to mention the packing and moving — and it’s no wonder home buying is considered one of the most stressful events in a person’s life.
Whether it’s your first time or your fifth, home buying is a complicated process involving complex details that, at times, seem only industry professionals can understand. That said, being armed with as much information as possible is one of the greatest tools in your home-buying toolbox. The more you know, the more likely you are to sail through the process relatively unscathed.
While it’s important to know what to do when buying a home, equally important is to know what not to do. People make mistakes, and fortunately for you, their mistakes can be your greatest lesson. Following are the top ten mistakes people make when buying a home.
Not Getting Pre-Approved
Sure, it can be tempting to scroll the listings and (when allowed!) stroll through open houses. But all too often, prospective home buyers do so without getting pre-approved by their lender, leading to a huge disappointment should they fall in love with the perfect place. The way things are moving these days, buyers need to have all their ducks in a row before they start shopping. In addition, pre-approval means you’ll know exactly how much house you can afford, and you can shop accordingly.
Not Understanding Wants vs. Needs
Sure, it’d be nice to have a swimming pool and a fireplace, but are they must-haves? Before going shopping for homes, it’s a good idea to make a list of the true musts (number of bedrooms, central air) and the “nice to haves” (updated kitchen, indoor laundry). It can often be unrealistic to find a home with all your needs and wants in your price range, so determining where to compromise ahead of time can help make the shopping process easier.
Underestimating Extra Fees
Experienced home buyers know the list price isn’t really the price you’ll pay in the end. Closing costs, points, inspection fees, and the costs of repairs — not to mention interest — are all tacked on. It’s important to familiarize yourself with these miscellaneous fees and be prepared to come up with some cash up front.
Not Thinking Ahead
A home is a long-term investment, but too often, buyers make the mistake of not thinking ahead. That cute little downtown bungalow is perfect for a couple, but if children are in their future, it may not be the best choice. Similarly, those who are hoping to age in place (or care for an aging parent) in their “forever home” should avoid staircases and other architectural elements that may be difficult for a person with limited mobility.
Applying for Credit
It’s normal to want new things for a new home, and it’s common to invest in new appliances or furniture prior to moving. But all too often, buyers apply for store credit or a new credit card to finance these items, thus destroying the whole deal. Lenders consider an applicant’s current credit status, and if anything changes during the process, it’s likely the loan won’t be approved.
Getting Stuck on Appearances
Not everyone loves shag carpet or floral wallpaper. But these cosmetic issues shouldn’t be a deal breaker when it comes to a home. Carpets can be replaced and walls painted, so it’s important to look past these design flaws and focus on what really matters: a home’s structure. It’s also easy to be sucked into flashy finishes and trendy décor, but it’s what’s beneath the surface that matters most.
Not Understanding the Market
Long gone are the days of lengthy back-and-forth offers and counter offers. With such low inventory in the Sacramento area, homes — especially mid-priced homes — are getting snatched up soon after hitting the market, and many over list price. Making low-ball offers in this market is a no-no. Similarly, in a slow market it’s perfectly acceptable — and expected — to offer less than asking and negotiate on price.
Letting Emotion Control Decisions
The home-buying process can be emotional at times, but it’s best not to let your emotions control your decision making. Falling in love with a home is common, but it can lead to buyers overlooking red flags or paying more than they should for a home. Some home buyers have passed on otherwise amazing homes for emotional reasons, such as their ex-husband had the same wallpaper or they were turned off by the seller’s porcelain doll collection.
Not Shopping Around
Many buyers have their hearts set on a certain type of house or a certain neighborhood. But failing to shop around will prevent them from weighing all the options — options that may be better for them in the long run. It doesn’t hurt to explore different areas or homes, even if at first glance it may not appear ideal. Having tunnel vision can not only keep you from your true dream house, it can also cost you more down the road.
Location is everything when buying a home. A common mistake is to focus too much on the house itself while ignoring its surroundings. Even seemingly perfect neighborhoods can be sketchy at night, or draw unwanted traffic, or — gasp — be known for their over-the-top holiday light displays come December. It’s best to research this all beforehand. Also, consider the school district, walk score and proximity to services and amenities. An important guideline to follow is to buy the worst house on the best block rather than the best house on the worst block.