Buying a new house is exciting, but it’s easy to be swept up in the process and make a mistake that might cost you thousands of dollars. Fortunately, if you know what some of the most common home buying mistakes are, you’ll be able to recognize and avoid making them.
That’s why we’ve compiled this list of five home buying mistakes people make that you’ll want to avoid. If you do so, your chances of getting a house you love at a price you can afford will go up considerably.
Home Buying Mistake 1: Not Knowing How Much Home You Can Afford
While we’ve all dreamed about living in an expensive home from time to time, you need to make sure your expectations are realistic when house hunting. That means knowing how much you can afford to spend on a house.
If you don’t avoid the temptation to look at the more expensive houses on the market, you run the risk of wanting to buy a house you just can’t afford. That can lead either to you trying to buy a house that’s out of your price range or leave you feeling disappointed with the options you can actually afford.
Instead, start your house search by looking at the lowest end of your price range and gradually moving higher. If you find a house you love that is at the lower end of your price range, you don’t have to look at a more expensive house and open yourself up to temptation.
Home Buying Mistake 2: Not Getting Pre-Approved For A Mortgage
Getting pre-approved for a mortgage is a vital part of the home-buying process. The most important reason is because it lets you know how much a financial institution is willing to lend you, as well as the conditions of the loan. Otherwise, you might end up wanting to make an offer on a house, only to discover you either can’t get the mortgage you need—or that it will only give you the mortgage with terms that you don’t want to accept.
Getting pre-approved for a mortgage can also help you figure out what you can afford, and as you’re aware knowing what you can afford can help you avoid temptation and be happy with buying a house that is in your price range.
Lastly, many relators will not work with you until you've been pre-approved for a mortgage. It shows that you are a serious buyer. It also give confidence to the sellers that your can make good on your offer.
Home Buying Mistake 3: Overlooking Flaws In The House
If you have a tight budget, you might be tempted to buy a fixer-upper—a house that’s available for a lower price because it needs some repair. While there is nothing wrong with buying a fixer-upper, if you don’t know what you’re doing, make sure you aren’t biting off more than you can chew. Otherwise, you’ll end up spending more on the repairs than you planned, hiring a professional to make the repairs for you or worse, not making the repairs at all.
The easiest way to avoid this trap is to honestly evaluate your abilities and your budget. If you feel like you can make the repair, give it a try. If you have any doubts, though, you should get an outside opinion from someone with experience doing home repairs about how difficult it will be to fix up the home.
Home Buying Mistake 4: Rushing To Make An Offer
In a hot home buying market, you might have to move fast if you find a house you like. However, if you rush to put in an offer you might discover that the house has some issues that you didn’t catch in your rush to buy.
If you find a house you like, be sure to inspect not only the house but also the surrounding neighborhood. Be aware of possible noise issues, like being close to a railroad or under a frequent flight path, as well as whether the neighborhood seems safe at night. Take at least a night to make your decision and do your research to make sure you’re getting a good home at a good value.
Home Buying Mistake 5: Waiting Too Long To Make An Offer
While rushing to make an offer is a common mistake, you also don’t want to wait too long. Otherwise you’ll discover that you’ve lost out on the house to someone who acted faster.
Unfortunately, there’s no hard and fast rule that might help you here. The process of buying a home can sometimes be a balancing act. The best thing to do is have a checklist of things you’ll want to investigate once you find a home you like. In addition to neighborhood safety and noise levels, this should include:
- Potential development plans for the area
- Zoning laws in the area
- Whether home values in the neighborhood have been rising or declining
- How busy the roads are
Buy A Home You’ll Love With Help From First Alliance Credit Union
While buying a home can be exciting, making any of these common home buying mistakes can result in heartbreak, overspending or both. When you know what you can afford and take the time to make sure you’re getting a home you like at a price that won’t strain your finances, you’ll do fine.
When you’re looking for a house, don’t forget to get pre-approved for a mortgage at First Alliance Credit Union. Our mortgage advisors will help you figure out what you can afford and help you at every stage of the mortgage application process.