So you’ve decided to buy a house. Congratulations! In some ways, this is the hardest thing you’ll do, because you’re making a decision that will affect your immediate and long-term future.
There are some common mistakes that you can make—and that you can avoid.
- Mistake #1: Not Getting Pre Approved For Mortgage
This is the first thing that you should do, even before you start looking at properties. In fact, that should be “especially” before you start looking at properties! Why? Because you don’t know exactly what you can afford, and you may be looking at properties that are beyond your means, Do enough of that, and the properties that are within your means won’t look as good after a while! Going into a real estate office with a preapproval in hand is best for everybody involved. Your real estate agent knows that the sale is a real possibility, as you have the means on hand to purchase an appropriate property. And your mortgage advisor knows that you’ve been matched up with the best possible financing for your needs. - Mistake #2: Buying a House That’s “For Sale By Owner.” Unless you really feel that you know what you’re doing, this can be a mistake. The seller is not going to give you as much information about the property as he or she would have to give a Realtor representing you, and that can be problematic. Besides that, you and the seller are going to be responsible for all the necessary transactions involved in purchasing the home, and unless you yourself have a background in real estate (and keep current with it!) this can be more of a headache than you want to take on. Finally, and possibly most importantly, your mortgage preapproval does not mean that every property will meet your lender’s requirements; a Realtor can help determine which ones do and don’t.
- Mistake #3: Looking at Houses on Your Own. By now you should be sensing that these mistakes are all interconnected. Not only do you need the assistance of a real estate agent when it comes time to buy the property, you also need their help looking. Do you really want to spend the time to educate yourself about everything that’s on the market in the area in which you’re looking? What if you’re not even looking in the right area? Driving around randomly looking for “for sale” or “open house” signs can be fun, and maybe it would work to give yourself one Sunday doing just that … but then on Monday take your mortgage preapproval and head into the real estate office.
- Mistake #4: Not Knowing Your Real Needs. It’s amazing the number of people who go out looking at houses—especially first-time homebuyers—who have only a vague idea of what they want. Those same people grow frustrated when they’re shown house after house that isn’t right for them by a real estate agent who doesn’t know exactly what they’re looking for. This isn’t a question of “I’ll know it when I see it,” because nine times out of ten you don’t see the potential of any property when you’re vague about what you want. Sit down. Take a deep breath. Discuss your needs with your home-buying partner. Make a list with several columns that will include things that the house must have (for example, three bedrooms, be on a quiet street, be in a good school district, all on one floor) as well as things that it would be nice if it had but aren’t dealbreakers if it doesn’t (a garage, space for gardening, a gas stove, proximity to a bike path). Think about this list, discuss it, refine it, and then share it with your real estate professional.
- Mistake #5: Not Communicating. It’s essential that you communicate clearly and truthfully with both your mortgage counselor and your real estate agent, especially if there are any changes to your situation once you’re in the buying process. If you withhold information or give erroneous information to your mortgage specialist, it’s guaranteed to come back and bite you in the end, and that’s not a surprise you want to confront at closing! And you’re wasting your time and that of your Realtor if you don’t go through the list from #4 with him or her … or if anything on that list changes while you’re looking.
