6 Common House-Hunting Mistakes to Avoid


  • If you spend too much money on a house, your life will get tougher after you close it.
  • Unless you hire a real estate agent or get pre-approved you are at a disadvantage compared to other buyers.
  • If you skip the pre-close inspection, you can make expensive repairs later.
  • See Insider Tips For The Best Mortgage Lenders »

It is easy to make mistakes when buying a home. The emotions, the time crisis, and the pressure to make a big decision can all lead you to overlook important details about a home.

Here are some common housing mistakes, as well as tips on how to avoid them.

This may seem like a no-brainer. Don't buy a home that is too expensive for you, do you? But think about what it really means to borrow too much.

"In my opinion, the worst mistake is preserving your home," Carolyn Morganbesser, senior manager of mortgage origins at Affinity Federal Credit Union, told Insider. "There's no room for a movie or dinner because your mortgage payment is higher than expected."

Think about what buying a home will mean for your finances after you close. Ideally, you want savings of three to six months to cover emergencies. You should also know how much you are paying each month and then make sure that the monthly mortgage payment doesn't take up too much of your monthly budget.

A real estate agent is a valuable tool, especially in a hot real estate market. In today's sellers market, the right real estate agent can help you move forward quickly and come up with a competitive offer. They'll also help you navigate the fine print that comes with buying a home.

When searching for real estate agents, look for candidates who are realtors. (Look for that capital R.)

All brokers are real estate agents, but not all real estate agents are real estate agents. Both are certified, but agents are members of the National Association of REALTORS® (NAR). This means they have to adhere to a strict code of ethics and may even have additional certifications.

When you apply for pre-approval from a lender, the company will send you an official letter advising you to work with you. The company plans to loan you out at a certain interest rate up to a set dollar amount.

Why should you apply for pre-approval early? Because showing a pre-approval letter to a seller shows that you are a competitive buyer who is in a good financial position. This can give you an edge over other potential buyers who don't have a letter yet.

Find out more and receive quotes from multiple lenders. »

Morganbesser recommended making a list of the things you want in a home. Divide your list into must-haves, things that would be nice and things that you can do without. For example, you might need four bedrooms, want an back deck, and could go with or without a fireplace.

You need to define your budget, house size and location. If you have (or are planning) to have kids, you'll want to learn more about the school district.

You can also think about parking, the number of levels in the house, and other things that will influence your decision. Then you decide which factors are deal breakers and which are not.

Understanding your priorities can help you make a quick decision about what is particularly useful in today's busy marketplace.

Don't just think about what your family needs now when you buy a home. Think about what you will probably need in the future.

For example, are you planning to have two children? Then you might need three bedrooms. You probably want to think about school districts now, not later.

Thinking ahead can save you the hassle and cost of selling this home only to move to another in a few years.

When you choose a home, the lender plans an evaluation. An appraiser visits the house to check its condition and assess the value of the house.

An assessment is not the same as an inspection. Don't think that you don't need to schedule an inspection just because the home has been appraised.

You are responsible for planning the inspection. This usually happens after you've made an offer but before you close it. The inspector informs you about problems with the roof, the cables, the electrical system and other known objects.

An inspection will show you what's wrong with the home so you can decide whether to close down, negotiate with the seller, or go out and find another home.

Laura Grace Tarpley is an editor at Personal Finance Insider, specializing in mortgages, refinancing, bank accounts and bank reviews. She is also a certified pedagogue for personal finance (CEPF). During her four years in the personal finance field, she has written extensively on ways to save, invest, and navigate credit.


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https://businessservicesnews.ca/2021/04/26/6-common-house-hunting-mistakes-to-avoid/

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