Home-buyer mistakes can be difficult to avoid when buying a home. Considering that only “sixty percent of recent buyers were very satisfied with their recent home buying process,”1 I’d like to walk you through the top 5 most common home-buyer mistakes to help increase your odds of being part of that sixty percent.
Common Home-Buyer Mistakes
1. Shopping for a home in a price range based solely on what a mortgage lender qualifies you for given your pay stubs and credit worthiness. Shopping for a home based only on these factors contributed to the housing crisis.
Solution: Before even applying for a mortgage, it is important to make a home buying budget. Examine what your fixed expenses will be after you buy your new home so you can pin down what you can actually pay. Just because you qualify for a $600,000 mortgage doesn’t mean it is a good idea. Check out this simple monthly budget spreadsheet.
2. Failing to account for the extra costs of buying a home and maintaining it. Remember the buck stops with you, the owner. If the A/C breaks or the basement floods, it’s up to you to take care of the problem.
Solution: Every year, you should add at least 1% of the purchase price of your home into your monthly budget 2 for repairs. You won’t always spend that money, but budgeting for it will leave you with extra to use when you need a new roof or a major repair.
3. Getting too excited about a property and letting your emotions get the best of your decision making.
Solution: Before you go on your first showing, set a goal to see three to five properties before considering making an offer. If you do fall in love with a property, make sure to compare the property to your needs and wants. This will help keep your logical mind engaged.
4. Not using a local Realtor or using the seller’s agent. A seller’s agent works for the seller not the buyer. Don’t you think you deserve someone looking out for you?
Solution: Get online and look for reviews and recommendations for Realtors where you plan to purchase. Oh, and your Realtor costs you ZERO! Yep, the buyer’s agent is paid by the seller, not the buyer. Here is what I do for my buyers.
5. Skipping the inspection or foregoing contingencies against advice.
Solution: An inspection is always a good idea. In fact, from the main inspection, you might find the need for a specific inspection for a major problem. Use the inspections and contingencies to make sure that, when you finally close on your new home, it is the home you deserve. Homes can hide some costly repairs. Get all the information you can before it’s yours. Home inspection myths BUSTED!
Use Your Head and the Internet
Most of these common home-buyer mistakes can be easily avoided if you spend some time researching how to purchase a home. From there, you only need to find a friendly Realtor to help you with local knowledge and be your advocate. I happen to know one, if you need a recommendation.
Have you made any of these mistakes and regretted your home purchase? Let me know in the comments.