12 Common Mistakes Made When Buying a House
Buying a house will likely be one of the most emotionally draining things you'll ever do. Whether you're buying your first home or your fifth, here are 12 common mistakes to avoid when house hunting.
Buying When You Should Rent
Buying a house isn’t always the best option. If you’re not planning on staying in a home for more than a couple years, renting may be a better option. You’ll also need to consider your personal finances—you may be able to afford your monthly mortgage payments but can you afford unexpected repairs such as a flooded basement or damaged roof?
You Don’t Know the Area
Appreciation Isn’t Guaranteed
Since housing markets go up and down, it doesn’t mean that when you’re ready to sell you’ll make money. Appreciation isn’t guaranteed when it comes to residential real estate, so consider the long-term when buying.
You Skip the Home Inspection
If the home looks flawless, it may be tempting to pocket that $500 you’d spend on an inspection, but home inspections are worth the investment. Home inspections can flag problems you may not otherwise see and give buyers peace of mind.
You’re Not Pre-Approved
If you want to be taken seriously in your home search, you need to be pre-approved by a lender. This will tell sellers that you’ve taken the necessary steps financially to qualify for a mortgage. In some markets, Realtors won’t even work with buyers who haven’t been pre-approved.
Down Payment 101
The days of putting zero down are gone. At minimum, depending on your lender, you’ll likely need 5 percent of the selling price as a down payment. Also, consider the fact you’ll want to keep some money on hand for closing costs and for an emergency fund. If you can’t put 20 percent down when buying a house, you may need to pay private mortgage insurance (PMI) so it’s best to understand the down payment terms.
It Was Love at First Sight
It’s important to look at a few houses so you can compare pros and cons. If you love the first home that’s great, but look at multiple homes. When you look at more homes, you’ll get a better understanding of your options, likes and dislikes.
Know Your DIY Limits
When it comes to buying a house that needs repairs, consider what you’re willing to deal with and what you’re not. Perhaps you feel comfortable purchasing a home with an old roof, but lead paint isn’t an option for you. If the home needs some work, understand the costs associated with the needed repairs.
Get a Second Opinion
Sometimes it’s best to get a second (or third) opinion when looking at a home. A friend or family member may be able to point out things you didn’t see, such as a yard drainage issue or that mold in the corner of the basement.
Know What You Can Live With and What You Can’t
If this is your first home, consider what you can live with and what you can’t. Perhaps the kitchen isn’t ideal, but you know a few appliance upgrades will do the trick. You wanted two full bathrooms, but can you live with one and a half? Know your must-haves.
Keep Emotions in Check
Buying a house is stressful, and buying in a competitive market will make it even more so. It’s important to keep your emotions in check, as you may end up overlooking some costly issues and overpaying for a home if your feelings cloud your judgment.