|
53 Homebuyer Mistakes To Avoid
1. We want to own, but we pay less to rent.
Lesson: Over time, you will pay far more to rent than to own. Plus homeowners gain the wealth-building power of home equity.
2. We want to own, but we don't have enough for a down payment.
Lesson: You don't need much money for a down payment. There are a lot of avenues to obtaining a down payment. You may not even need a downpayment.
3. We can't afford to buy; the monthly payments are too high.
Lesson: If you can afford to rent, you can afford to own.
4. No lender will give us a mortgage.
Lesson: Banks and mortgage lenders have dozens of special programs for hard-to-finance buyers. Even better, you might not need bank financing.
5. We were told not to buy unless we planned to stay put for a least four or five years.
Lesson: Don't put off buying because you may be movine within a few years. Instead, execute a short-term ownership strategy.
6. We don't know exactly what we want.
Lesson: Even if you did, more than likely you will change your mind. Be prepared for trade-offs, compromises, and creativity.
7. We have to have a pool.
Lesson: Don't let the tail wag the dog.
8. We liked the house on Elmwood best, but our funiture wouldn't work there.
Lesson: Sell the furniture that won't work. Buy furniture to fit your new house. Don't buy a house to fit your old furniture.
10. We don't want to to eat beans for dinner every night.
Lesson: Buy a home you can afford. Put as much money as practical into the purchase of your new home, but don't underestimate your other necessary living expenses. You don't want to end up "House Poor".
11. There were so many Home Owner Association rules, that it was like living under Socialism.
Lesson: It is important to consider the HOA rules before buying a home. If you don't follow them, they can make your life miserable. Most HOA's provide a positive force and environment.
12. We bought because we were so tired of looking.
Lesson: NEVER buy just to "get the decision over with."
13. We don't want to buy now because we don't know if home prices have reached the bottom.
Lesson: You're not that smart. No one is smart enough to know when home prices have reached the bottom unless they are looking backwards. Look for a good deal and you won't get hurt. Don't think you can "steal" a home. NOW is the time!
14. We want to buy our home as an investment.
Lesson: Your home is were you live and you should consider it an investment. However, the investment aspect to your home purchase is secondary since we never know how our investments will perform. Better you should concentrate on buying in a good, well located neighborhood with good schools. Purchase with an eye towards someday having an easy time of selling your home.
15. We were told never to buy the biggest or most expensive house in the neighborhood.
Lesson: All things being equal, there is some wisdom to that assumption, but it isn't necessarily true depending upon a variety of factors concerning the most expensive home you might be considering.
16. I'd never by a condominium. They make poor investments.
Lesson: Properly selected and researched, condos can make VERY good investments.
17. IBM never lays anyone off, do they?
Lesson:Before you buy a home, evaluate the strength of your local economy.
18. With all the new construction, we thought the economy was really booming. Home prices had to go up.
Lesson: After a boom comes a bust. The potential appreciation of a new home in a new subdivision depends on many factors.
19. We thought we got a real bargin. Our house was listed $20K below other homes we looked at in the neighborhood.
Lesson: When considering purchasing a home, the "sold" prices tell a much more compelling story that the "list" prices.
20. We thought we got a real bargin. We paid $10K less than the appraised value.
Lesson: Appraisals can be tweaked to arrive at virtually any price at which the appraiser wishes to arrive. Know why the appraisal was done, and when it was done. Was it done for a divorce settlement, the settlement of an estate, refinancing, or was it done strictly to determine the current market value of the home prior to listing it for sale.
21. The "comps" we got when we purchased our home weren't very good.
Lesson: When relying on comps make sure you are comparing apples with apples.
22. We figured the swimming pooladde more value that it really did.
Lesson: A rule of thumb for a basic pool is that it loses 50% of its value the first year and 10% a year after that
23. We looked at the "list" prices and feel we overpaid.
Lesson: It is much better to base an offer on the "sold" prices in the neighborhood.
24. The sellers named the price, but let us set our own terms. We thought it looked like a good deal.
Lesson: Never pay more than the market value of a home.
25. Compared to where we lived, everything looked like a bargain.
Lesson: When moving from one neighborhood or area to another, you need to recalibrate your data. Do your homework and don't overpay!
26. My agent told me this was a good school district.
Don't take everything your agent tells you at face value. It is up to you to do the due diligence on a subject as vitally important as school district. Do the necessary research, attend a PTA meeting, call parents who have children that attend the schools in the district, and most importantly, visit specific schools yourself.
27. We never saw the railroad tracks.
Ask your agent to speak with the seller in order to determine whether or not there are any disturbing noises in the neighborhood. Before you buy, always see what the home looks (and sounds!) like at different times of the day.
28. When we bought our house, the land across the street from the subdivision was a cornfield. Now it's a shopping center parking lot.
Always envision what your neighborhood will look like it the future. It's called doing your due diligence. Be sure to ask lots of questions of the folks on duty in the sales office. Visit with the city planning department to get a snap shot of what the future might hold.
29. I didn't realize that the neighbors were such animals.
Interview your neighbors before you buy anything. Look to the right. Look to the left. Look across the street. Be sure to check the condition of the alley ways. Is the alley trashy or neat as a pin? Ring the door bell and introduce yourself. What's their appearance? Look over their fence and see what their backyard, as well as, their front looks like.
30. After We Moved Into the 'Hood We Realized Our Neighbors Were A Bunch Of Snobs.
Interview your neighbors before you buy anything. Go across the street and next door to the home you are considering purchasing. Introduce yourselves. Now is the time to determine whether or not your personalites coalesce. After you sign the papers, it's too late!
31. What! We can't build a fence around our own yard? Isn't that unconstitutional?
Look around. If none of your neighbors have fences or only have a particular "type" of fence, there is a fairly good chance that your friendly HOA has strict rules and guidelings on the subject. Learn what they are before you buy into a particualar neighborhood. And don't plan on taking your HOA to court. You'll lose!
32. No need to worry. Those HOA rules are never enforced.
The hell they're not. Sometimes they're enforced with a vengence. I've seen cases where individuals ignored their HOA covenants, built a garage, and then were sued by the HOA. The end result ... they had to take the garage down and put things back the way they were!
33. We bought this home because we thought it was in another school district.
You must confirm (with an emphasis on YOU) which school district encompasses the home you are contemplating buying. As most people who support public schools buy homes largely because of the school district, this can be a tragic mistake that will cost you $1000's when you sell! Many school districts like the FABULOUS Richardson ISD provide a web site whereby you enter the address of a property and are informed as to whether or not that school is part of the RISD attendance area.
34. We didn't know there was a sewage treatment plant nearby. The wind was blowing in a different direction on the day we looked.
YOU need to do the "due diligence" when you are purchasing a home. Foul odors will definitely effect your home's resale value, so exercise caution. Visit a home you are considering buying at different times of the day and on different days. Most importantly, talk with people in the neighborhood, and particularly those who might become your new neighbors! What are their experiences in the 'hood?
35. No one told us that the home we bought was in a Flood Plain.
Well they probably did and you weren't paying attention. Because if they didn't provide you with that info vis a vis the seller's disclosure statement, you can sue the seller, and or their representative. Before closing, your lender will determine whether or not your home is in a flood plain and you'll have to have flood insurance BEFORE you can close. The risk of your home flooding naturally determines the cost of the insurance.
36. The agent told us it only took 15 minutes to drive downtown.
From his mouth to God's ear. Your drive time is inversely proportional to your quality of life in the big city. People pay big premiums in order to live close to where they work. The ONLY way to determine the distance and time to your place of employ is to make the drive yourself. Besure to make that drive in rush hour, as well as, on the weekends!
37. We didn't walk the neighborhood. It looked pleasant enough when we drove through.
You should have taken time to walk the neighborhood, speak with them, and discover if the neighbors are friendly. And while you're at it, find out where they work, and how long they've been employed. Ask the neighbors about their neighbors. Find out everything you can, because you're going to be there a while and you want to make sure it's a "fit".
38. Our agent told us that it was a lot of house for the money.
You may have determined by now that it was a lot of money for the house. Bigger houses mean bigger property taxes, more insurance, and higher utility costs. A bigger house usually means bigger everything. Buy the size home you need!
39. Our agent was part order taker, part chauffeur, and part narrator - but the service we needed wasn't provided.
Know what services you expect to receive from you agent and discuss with your agent their ability to deliver on those expectations. Picking an agent on the basis of which agent will deliver the biggest discount on their commission is a prescription for major disappointment.
40. Our Agent Never Mentioned ...
Did you ask? Don't wait for your agent to mention defects in a home or neighborhood. Be proactive and ask aour agent about "things" that concern you. Getting the "nitty gritty" and finding out the "skinny" on a property is a much less painless procedure BEFORE you've signed the closing documents and handed over the downpayment!
41. We didn't Hire a Professional Inspector. My Dad Knows All About Houses.
Don't substitute family members or friends for a professional inspection by a professional inspector. It's important that you perform due diligence making sure your inspector is someone reputable. It is perfectly acceptable that you ask your Realtor for guidance in making a selection of inspectors, but understand you are capable of hiring an inspector without their input. Ask your dad, brother-in-law or Uncle Harry to inspect your home as an additional safeguard. Unfortunately, if they make a strategic blunder, you won't have any recourse with a family member, as you would with a licensed and bonded inspector.
42. We didn't think a new construction home needed to be professionally inspected.
Think again. Even when you're 100% sure of your builder's reputation, buy yourself some piece of mind and secure a professional inspection. If you are like most people your home is the most expensive purchase you’ll ever make. You want to make sure you’re getting everything to which you’re entitled, if not more!
43. How could this home have lead based paint? I thought it had been outlawed years ago.
It was, in 1978. But, that doesn't mean your home built before '78 doesn't have lead based paint in it. If you purchase a home built before 1978, and Lead Based Paint disclosure form needs to be an addendum to your contract.
44. Now we know why the sellers put up paneling in the downstairs den.
Be cautious of recent redecorating or remodeling by the sellers. They may be hiding a problem. For the same reason, don't hesitate to look under area rugs!
45. We should have looked at the seller's utility bills.
Absolutely! Ask your agent to see a copy of all the utility bills for the past year. It's your right!
46. We underestimated the costs of the improvements we wanted. Before we could simply replace the AC and the furnace, we discovered that the duct work needed replacement, too.
It all adds up ... quickly. Don't assume, and do your homework. Make a list of what you expect to do in terms of repairs or updates, and during your option period, bring in a contractor to give you an estimate of costs.
47. The townhouse looked really GREAT! We discovered that lugging groceries up the stairs from the 1st floor garage entry was a drag. And then when the baby came ...
Looks aren't everything. Evaluate a home's "LIVABILITY". Quite possibly 3 floors is not the livability you're looking for.
48. We had wonderful privacy until the neighbors built an addition that included two huge windows that looked directly into our backyard and pool area.
It can happen, and there might be precious little you can do to stop it. Before buying a home with a view or total privacy, determine whether the view or privacy is "protected."
49. We were too focused on "problems" regarding wall papers, paint, and carpeting. We should have considered the possibilities.
Think possibilities when buying your new home. Think long term, not short term. Cosmetic issues like paint, wall paper, and carpeting are the easiest and least expensive improvements you can make to your home and provide the biggest "bang for the buck".
50. We thought our agent represented us.
As a Realtor, I never want there to be any misunderstanding as to who I represent. The State of Texas requires buyers and sellers to sign a document entitled "Information About Brokerage Services" which outlines the various scenarios of agent responsiblity. It is a semi-complicated and extremely important part of the contract process that should be explained and discussed to your complete satisfaction.
51. I purchased my home directly from the owner (FSBO) and lost $5000.
Selling a home without an agent is similar to representing yourself in court. In such a situation, the adage states that you have a fool for a client. Buying a home without the benefit of a well qualified agent who is knowledgeable, competent, and someone you feel comfortable with is a mistake for many reasons, but here is one. The commissions paid to your agent are paid by the seller, not you.
52. We didn't know we could withdraw our offer.
You can withdraw an offer anytime before the seller accepts it. Also, in Texas as a buyer, you have an option period for a variable number of days within which you can cancel your contract for any reason whatsoever.
53. We never met the sellers. We didn't know anything about them.
Get to know as much about them as possible. Go to the tax records and look up the neighbors and give them a call. Be very tactful, and ask the neighbors (maybe not the right next door neighbors, but someone down the street) about the neighborhood. Explain that you are just doing your due diligence as you are planning on buying a house on their street. If there is something unsavory afoot, you'll probably get wind of it during your conversation. They'll respect you for making the call.
|
.jpg)
