Buying and owning a home is an essential part of having a high standard of living, a sense of financial comfort and control, as well as a personal sense of well-being and peace of mind in your own life.
Being a homeowner is a critical part of the American dream, and the process of buying a home can be one of the most important steps in your life.
Because there are millions of homes bought and sold in America and around the world every year, there is a precedent for common mistakes that people can make when buying a home because every mistake that you can possibly think of has been made by someone else at some point in the past.
This list of the 7 biggest mistakes that people make when buying a home should give you a good idea of some important things to avoid during your home buying process, and make the process of buying a home as positive and stress-free as possible.
Ignoring The Extra Or Hidden Costs Of Buying A Home
Many individuals or couples who are first time home buyers may not realize all of the extra costs that are associated with taking title of the home in the closing process.
It is important that you focus on the size of your principal and mortgage payment, the PITI payment (with added tax and insurance), the utilities that you will be assuming control of when you take possession of the house as these are the regular financial considerations for buying a house.
But the costs you may not have thought of are added closing costs for the title company, the cost of a home inspection and appraisal, and having a backup fund of savings for any other miscellaneous costs or repairs that might occur after you move in.
Making Large Purchases On Credit After Getting Mortgage Pre-Approval
This can be one of the biggest mistakes that a home buyer can make because it can potentially change your credit report and jeopardize your ability to obtain financing for the house.
This is one of the horror stories that has happened countless times in real estate, and it can mean that when it comes to closing day and the bank recalculates your financing and credit it has changed since you first got your preapproval.
This is a very inconvenient situation for you as the buyer but also for the seller, who might have already moved out of their home and is waiting for the money to clear from escrow.
Forgetting To Budget For Utility Bills And Unexpected Costs
Because moving into a new house can be an emotional process for a family, one of the best ways to guarantee your peace of mind is to save up enough money to be able to pay for unexpected bills or any other unexpected costs that might come up.
There can always be unexpected problems with a house such as the hot water tank or furnace needs to be replaced, so it is a good idea to have a “house fund” where you have enough money to cover any unforeseen expenses that you did not anticipate.
Neglecting To Pay For A Home Inspection
Some people insist that they do not need to have a home inspection before buying a house, but I believe this is a big mistake that everyone should avoid.
It is the home inspector’s job to be able to identify things that ordinary people would not think to look for, such as excess humidity in the attic which could create mold or some other type of structural defect that could impact the value of your home.
Even though you will likely need to pay for a home inspection out of pocket, it is worth the cost compared to the problems that might come up in the future that you would have already known about if your home was properly inspected.
Making The Mistake Of Not Getting Everything In Writing
Verbal agreements that are not in writing can cause serious problems and miscommunication between buyers and sellers, so it is wise to get everything that you talk about in writing as part of the deal.
Every standard home buying contract should have an addendum form where you can add any other terms and conditions that you want added to the deal, so play it safe and get every detail in writing.
Buying A House If You Intend To Move Again Soon
This is where it is important to ask yourself whether it is more important for you to rent or buy, and this means taking a close look at your priorities and career.
If you think that you might need to move again within five years then it is important to compare the cost of buying to the cost of owning, because you could be putting yourself in a position where you are forced to sell your house before you can afford to move.
Ignoring Other Inspections Like Mold And Termite Inspections
When you are buying a house it is a good idea to pay a little extra for all types of inspections that you might need including a radon inspection, mold inspection, and termite inspection.
Even though this might add to your initial costs of purchasing the home, it will let you know that there are no structural problems with the home and that it is safe for you and your family to move in to, which can give you tremendous peace of mind.
Final Thoughts About Home Buying Mistakes
The great thing about buying a home, even though it can be a very complicated and emotional process, is that millions of people before you have done the exact same thing and successfully closed on the house of their dreams.
There is no mistake that you could make during the home buying process that someone else hasn’t made before, so by learning and avoiding the most common mistakes of buying a house you can make sure that your deal closes without a problem.