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7.5 Mistakes Homebuyers Make

Buying a home, especially your first home, is an extremely gratifying experience. It is an important early investment opportunity for many, and yet it can also have deep emotional meaning. With a firm plan going in, you can minimize the many headaches and even have a bit of fun in the process. To help you in creating this plan, here are some of the biggest mistakes homebuyers make:

1. Forgetting the Hidden Costs

This will be a nuisance primarily for first-timers. If you’ve only ever rented, squatted, crashed, etc., then the little joys of home-ownership will be eye-opening. Of course, “little joys” refers to things like maintenance, repair costs, general upkeep (time to buy a lawn mower!), and other fun stuff like property tax, mortgage insurance, and a laundry list of  other insurance coverage.

BONUS: This reminds me, don’t balk at getting an inspection. If you’re looking at an older house, the inspection report will help you begin to calculate your potential hidden costs even before you buy the house!

2. Not Having Your Own Dedicated Agent

My wife and I are guilty of this. We allowed a “mediator” to handle our negotiation. This meant an agent equally represented both us and the sellers. For the first-time buyers out there, when there’s a real estate deal on the table, it’s always in the seller’s and representatives’ best interests to make sure the deal gets done. The least you can do is make sure you don’t have the same representative as the seller. It didn’t take us long to feel like we didn’t have anyone advocating for us in the deal. It was not fun, and I hereby advise against it.

3. Not Asking Weird Questions

Ask weird questions. Anything under the sun. If you can wonder about it, then it can’t hurt to see what the sellers have to say about it. Ask why the seller is selling. Ask what, if any, furniture is included in the sale. Ask to look under the rugs and under the sinks. Is the house in a rural area? Ask about cable and internet service. Maybe it’s spotty, maybe it’s non-existent. Either way, these are just a few of potentially many things that you’d really rather know before making a decision.

4. Not Sticking to Your Price Range

Before walking through a bunch of open houses, and before talking to any agents or lenders, come up with your own idea of your price range. As you investigate your finances and gather information about the local housing market, you can adjust a bit, but it’s helpful to have a number before you start.

As a recent first-time homebuyer, I can tell you that I had a fantastic experience with my lender. She was cautious and almost overly-protective of our financial situation. She helped us stay realistic. This is not necessarily the norm. I’ve heard testimonials from friends who had the opposite experience, reminiscent of the irresponsible lending practices that contributed to the Mortgage Crisis and The Great Recession in 2007.

Know your price range, and stick to it. If you exceed your budget, you are endangering your ability to keep up with the hidden costs of home-ownership. Remember mistake #1?

5. Not Having a Wish List

This list is important, and it’s important that it be made before you do any serious looking. If you look first, you will be making a list based on something you’ve already seen. Don’t do this. Doing these things out of order will compromise your list. It’s like your budget. It’s something you need to at least have an idea of before you start looking. Maybe you love basements (I know I do). Put it on your list. To my chagrin, most houses in Texas don’t have basements because the soil doesn’t support them. I was able to live without it, but you better believe it will still be on my list next time I’m looking for a house.

My wife and I were looking for something with 2-3 bedrooms and 2 baths. We ended up with 3 bedrooms and 1.5 baths. Since it was a home for just the two of us, we could be flexible. If we had a larger family, then we’d have had to be pretty strict about the minimum numbers of beds and baths. Knowing what you can’t live without, also what you would want but could live without, will help you weed out bad options. If you have a huge family and want 3+ baths, why would you even bother looking at anything with less than, say, 2.5 baths?

6. Being Too Picky

I know, I know. This is very nearly a contradiction. But it’s not! What this really means is allowing yourself the flexibility to actually make a decision. Your dream home may not exist in the time and place in which you are looking. Aside from sticking to your price range, and making sure your minimum absolute requirements are met, it’s important to see the bigger picture as well.

In this case, seeing the bigger picture might mean buying a home with ugly wallpaper, or tile floors instead of wood. These are cosmetic issues that are not inherent to the house. They can be changed. If buying a house with a few easily fixable blemishes means getting a house you otherwise love, and more importantly, can afford, then are you really doing yourself a favor by turning your nose up?

It’s generally better to see the potential in something than to have the full potential spelled out to you by the seller. Generally better, and ALWAYS cheaper.

7. Moving Too Quickly

Also known as “falling in love,” moving too quickly can be a major mistake in itself, but one that will also compound any other potential missteps in the process. As with most major life decisions, taking your time, and talking things over with your loved ones makes for a more informed decision-making process. Moving too quickly is the ultimate clichéd broken record of mistakes homebuyers make.

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