It’s finally time to buy a house but are you really prepared? Let me share with you 7 common mistakes to avoid when buying a home.
Ahh, homeownership. The cornerstone of the American dream. Ask anyone and this landmark is likely on their radar. Possibly the largest purchase you’ll ever make, it’s important to be sure you know the 7 mistakes to avoid when buying a home.
Let’s make sure that new home really is sweet.
Mistake #1: Not Waiting for the Right Home
Don’t let your excitement for buying a home blind you from little details that can have a big impact.
You might find a modest two-bedroom at a reasonable price but if it suffers from a major problem like a sinking foundation, it can lead to huge problems later. Here’s another example.
Some friends of mine moved up the east cost from the opposite end and purchased a house on a land lease. Now, it is practically impossible to sell because of that land lease.
Pay attention to every detail, ask lots of questions and don’t let the beauty of the home keep you from catching important issues.
Mistake #2: Not Saving Enough for a Down Payment
Without saving enough of a downpayment, you may find yourself in a bind when you go to sell your home due to limited equity. You may even be forced to maintain a high asking price, which could result in breaking even with closing costs as well as make you less competitive on the open market.
Instead of sinking that savings into furniture or another investment, put it towards a solid down payment for buying a house.
For more information on the right way to start home ownership, check out “A Simple 4 Part Recipe for Secure Home Ownership.” It will tell you everything you need to know to make the financial side of buying a home a sound decision.
Mistake #3: Not Considering All Your Ongoing Costs
A common misconception if a mortgage is equal to your rent is that you should be a homeowner instead. A hint of this mentality means you probably aren’t considering all of the ongoing costs associated with ownership after buying a home.
Homeownership vs. renting is a classic example of apples vs. oranges. There are numer0us additional costs, especially long-term, and most of the benefit stems from staying in a property for an extended amount of time.
Check out “Should You Rent or Buy?” to help in your decision making process.
Mistake #4: Not Getting a Quality Home Inspection
It can be easy to phone in the inspection to save a few bucks when buying a home, but don’t do it. A home inspection is critical to identifying potential problems but to also understand how your new home works.
You’ll be the one managing this investment so be sure to choose a quality home inspector, like my friend Eric Wolff at The Certified Home, instead of your realtor’s cheap buddy. The little bit you try and save may come back to bite you later.
Mistake #5: Not Shopping for a Realtor
Most people are so ready to buy and sell that they grab the first realtor they find. This is a huge mistake. Interview at least two or three realtors before signing a contract to list your property.
It might not cost you to secure a realtor while buying a home, but signing with the wrong one can cost you thousands in a missed opportunity, whether finding the right property or negotiating the best deal.
Find a realtor who’s experienced, who’s from that community and who has great recommendations.
Mistake #6: Not Saving for Repairs
Okay, so now you’re in the property. Just because your home is new to you or even a newer build doesn’t mean you are immune from making mistakes.
REPAIRS! Whether it’s a septic tank replacement, frozen pipes, a busted door or something else, be prepared for inevitable repairs!
This is also where the home inspection will have been helpful. If you step into homeownership knowing there are repairs on the horizon, you can prepare for them.
So, have a budget for the unexpected. I recommend $100 a month to start. You’ve got to start somewhere.
For help developing a solid plan, contact me for a free consultation today.
Mistake #7: Not Budgeting for Upkeep
So, we all know things break but what about maintenance? Who’s going to mow that lawn or plow that driveway?
Whether chimneys, gardens or sprinklers, a home needs a curator and by buying a home, you’ve volunteered.
If you don’t save for these expenditures, it can break the bank and lead to costly repairs. For more on this, check out “9 Home Upkeep Costs You’re Forgetting.”
Don’t get stuck in one of these seven mistakes when buying a home. Be sure to avoid them and keep more money to fund this and many more dreams.
Question: Are you getting ready to buy a home? Are you confident you’ll steer clear of these seven mistakes? Don’t put yourself and your big purchase at risk. Let me help.
Additional Action Items:
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