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 Max Out Your Budget
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.
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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.
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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.
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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.
Buying in the Wrong Season
Follow these eight steps if your looking to buy your first home.
Judging a Book by its Cover
Photo: Russ Widstrand
Jumping the Gun After One Viewing
Get tips on doing your own home inspection here.
Skipping the Inspection
Ignoring Old Paint
Skipping the Final Walk-Through
Not Being Neighborly
Trying to Make it Work
Make sure you don't regret anything when you buy a house.
Forgetting About Future Development
When you have a specific house in mind, think about potential developments. For example: If the home is near a busy road, will there be expansion in the near future? If there is a lot of open space around the home, will more homes be built in the area soon? If there are several homes for sale in the neighborhood, are they selling quickly and who's moving in? It may be difficult to find concrete information about future developments, but keeping some what-ifs in mind as you look can help you find your ideal home. Also, keep in mind the potential resale value of your future home because no one knows what the future holds and you may need to sell earlier than you imagined.
Learn about some of the best and worst projects to improve resale value.
Finding Out the Commute is Too Long
At a certain point, a commute becomes a burden. If your commute is taking valuable time away from your family or personal goals, look for a home closer to your work. It may be worth it to downsize to a smaller home instead of losing too many hours out of every workday.
Home inspectors typically don't inspect underground pipes, septic tanks or wells, all of which are particularly expensive to repair or replace. You can protect yourself by finding a home inspector who carries “Errors and Omissions” coverage.
Find out how to fix a roof.
Avoid these common National Electric Code violations DIYers make.
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Not Doing Enough Research
Not Saving Enough
Learn more about down payments and how they affect mortgage payments.
The Experience of People Around You
Which Way do the Windows Face
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Homeowner's Association Details
The Age of Appliances