10 First Time Home Buyer Blunders

Submitted by A1 Home Inspection on Sat, 09/20/2010 - 12:27.

1.  Not knowing your credit score.  Research your credit report months before going house shopping.  If something pops up, you'll be able to correct it before shopping for a loan.  Plus, you'll get a better interest rate if your score is good.

2.  Failure to pre-approve.  There is no use shopping for a home without your pre-approval.  You need to know how much you can afford.  The pre-approval aligns your wishes with reality.  And the big bonus of pre-approval is having the advantage over a competing non-approved buyer.

3.  Failing to check your finances and make a workable budget.  Try not to devote more than 30% of your household income to housing.  This should include all taxes, insurance, principle and interest.  If you're pushing 35%... Time to reconsider that house you really want, but don't necessarily need.

4.  Not knowing the "Hidden costs" of Home Ownership.  Before you buy, find out what utilities are averaging for the home.  You wouldn't buy a car without knowing what your annual fuel costs will be, now would you?  Plan on devoting up to 1.5 to 3% of the home's value on upkeep and maintenance.

5.  Failure to seek professional help.  Find a good Realtor, Loan Officer, Home Inspector.

6.  Picking your professionals blindly.  Ask your friends, neighbors, relatives and co-workers whom they might recommend for quality and a good home buying experience.

7.  Thinking you'll get everything you want.  Time to be flexible.  Sit down with your Realtor and make a want/needs analysis matrix.  Square footage, number of bedrooms or the wrong town may be deal breakers.  You should concentrate on all of the needs and a few of the wants.  Stay within your long-term budget when assessing the wants.

8.  Not supressing those emotions when hiring a home inspector.  A home inspection is an objective assessment of all the systems and components of the home.  Keep it that way.  The inspector should be hired independent of the broker or agent.  If your agent suggests one particular inspector, ask them for two or three more companies.  When you make your offer, be sure that offer is contingent on a favorable home inspection.  Sometimes, but rarely, an inspection will break the deal.  Make certain that the seller will pay for any treatments, repairs or replacements up to a certain dollar amount written into the contract.

9.  Not doing research on the neighborhood.  Many sources are available to find info on schools, crime, churches and shopping.  You can change the house, but you can't change your neighborhood.  One personal tip:  Talk to the neighbors about traffic and speeding tendencies.  If you have the time, sit in your car on the street around rush hour.  This will give you a good indication if speed limits are observed or disregarded...

10.  Not thinking about the "other" side.  Think of the favorability of selling the home you are about to buy.  How long has it been on the market?  If it's old inventory on the market, why?  Life throws many curveballs such as a job transfer, another "surprise" child, or care of an aging parent/relative.  Someone may not like the jungle-amount of landscaping that you loved when you bought your dream house.