Buying a home is one of the biggest decisions you’ll ever make in your life. It’s also one of the most expensive ones. That’s why you want to avoid making any costly mistakes that could ruin your dream of homeownership. Here are 7 home buying mistakes to avoid at all costs.
1. Not getting pre-approved for a mortgage. Before you start looking for homes, you need to know how much you can afford to borrow and what kind of loan terms you can get. Getting pre-approved for a mortgage will show sellers that you’re serious and ready to buy. It will also help you narrow down your search and avoid wasting time on homes that are out of your budget.
2. Skipping the home inspection. A home inspection is a crucial step in the home buying process. It will reveal any hidden issues or defects that could affect the value and safety of the home. Skipping the home inspection could cost you thousands of dollars in repairs or even make you regret buying the home altogether. Always hire a qualified and reputable home inspector and attend the inspection yourself.
3. Making a lowball offer. In a competitive market, making a lowball offer could backfire and make you lose out on your dream home. Sellers are likely to reject or ignore an offer that is too low or unrealistic. Instead of trying to get a bargain, make a fair and reasonable offer based on the market value and condition of the home. You can also include a personal letter to explain why you love the home and why you’re the best buyer for it.
4. Waiving contingencies. Contingencies are clauses in your contract that allow you to back out of the deal if certain conditions are not met. For example, you can have a financing contingency that lets you cancel the contract if you can’t get a mortgage, or an appraisal contingency that lets you walk away if the home is appraised for less than the agreed price. Waiving contingencies could put you at risk of losing your earnest money deposit or being sued by the seller if something goes wrong.
5. Not hiring a buyer’s agent. A buyer’s agent is a real estate professional who represents your best interests in the transaction. They will help you find the right home, negotiate the best price and terms, handle the paperwork, and guide you through every step of the process. Not hiring a buyer’s agent could leave you vulnerable and uninformed in a complex and stressful situation. Plus, hiring a buyer’s agent won’t cost you anything, as they are paid by the seller’s commission.
6. Falling in love with one home. It’s easy to get emotionally attached to a home that seems perfect for you. But falling in love with one home could cloud your judgment and make you overlook its flaws or pay more than it’s worth. It could also make you feel devastated if you lose it to another buyer or if something goes wrong with the deal. Instead of falling in love with one home, keep an open mind and look at multiple options until you find the one that meets your needs and budget.
7. Not saving enough for closing costs and other expenses. Buying a home is not just about paying the down payment and the monthly mortgage payments. There are also closing costs and other expenses that you need to pay before and after you move in. Closing costs are fees charged by lenders, title companies, appraisers, inspectors, attorneys, and other parties involved in the transaction. They typically range from 2% to 5% of the purchase price. Other expenses include moving costs, utility deposits, furniture, appliances, repairs, maintenance, taxes, insurance, and more. Not saving enough for these costs could leave you broke or in debt after buying your home.
