10 Homebuyer Mistakes to Avoid
Posted by Colorado Group Realty on Tuesday, February 23rd, 2010 at 3:53pm.1. Not checking your credit report and score
Review your credit score report a few months before you begin your house hunt, and you'll have time to ensure the facts are correct and dispute mistakes before a mortgage lender checks your credit. You can access a free copy of your credit report at annualcreditreport.com once every 12 months.
2. Not getting approved
Getting preapproved can help you save time by looking for homes that you know you can afford instead of lusting after something out of your price range. And it will put you in a better position over another bidder with no preapproval.
3. Not creating a long-term budget
A good rule of thumb is to devote no more than a third of your monthly household income to housing costs, which include mortgage principal, interest, taxes and insurance.
4. Forgetting about the hidden costs
Make sure you factor in the purchase price of the home, cost of taxes, insurance, utilities and fees. There are several hidden costs that first-time home buyers neglect to prepare for. They can be anything from closing costs to appraisal fees, escrow fees, homeowner's insurance fees, property taxes and even moving costs. Another factor is the cost of repairs and maintenance.
5. Not using professional help
Sure, it's possible to go out and buy a home without the aid of a professional real estate agent. But think about how much time and stress a good agent can save you. A specialist has time to sift through all the homes on the market, those under contract, and those that have been sold. They have time to show you homes, create comparative market analysis to determine proper pricing and meet with necessary inspectors. Don't forget about reviewing the 70 page legal contracts.
6. Picking your real estate agent and lender blindly
Find an agent you are comfortable working with. Ask relatives, friends, neighbors and coworkers for referrals. A good agent will be friendly and accommodating, show you homes that fit your parameters and help you strategize during the bidding process.
Similarly, the buyers should feel at ease with and have complete confidence in their mortgage lender, and they should fully discuss and understand their financing options with the lender.
7. Thinking you'll get everything on your wish list
Sit down and make a list of your must haves and your wishes.
8. Not keeping your feelings in check before hiring a home inspector
Before you start picking out paint colors, bring a home inspector to check the safety of your potential new home. Inspectors will evaluate the structure, construction and mechanical systems of the home and will give you the approximate price of repairs that may be involved.
9. Not researching your neighborhood
Consider the school system if this is or will be important to you. Research by meeting the principal and talking to parents. To learn more about the community, look at the local newspaper.
10. Not considering the resale value of your home
Just because you love to landscape or enjoy a bright pink backsplash, it doesn't mean a prospective buyer will. Consider these items when remodeling, etc.
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