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Buying a Home: Mistakes to Avoid PDF Print E-mail
Purchasing a new home can be a complicated process, and buyers - like anyone else - can make mistakes when they're not careful. Thankfully, such slip-ups can be avoided by learning what's expected from each of the various parties involved - including yourself. Make sure to avoid these common mistakes, and buying your new home will be easy and worry-free.

1. Not Defining Wants and Needs

One mistake that buyers make is that they begin visiting homes too early. Before you look at a single house, develop a specific list that separates what you want from what you need in a home. For example, you may want a home with high ceilings and hardwood floors but need two bathrooms and a spacious yard. Specifying what is and is not necessary makes the house-hunting process much easier. Buyers who know the difference between their desires and demands usually have a better grasp on their budget.

2. Misunderstanding Agents' Roles

Ask your real estate agent to clearly explain the roles and responsibilities of both selling and listing agents (and of buyers and sellers) in any home purchase transaction. One important concept to nail down early is who represents whom in purchase transactions; buyers often misinterpret a licensee's actions as representing only their interests. What they often fail to grasp is that agents have legal and ethical obligations on both sides of a transaction. Make sure your agent has clearly explained how commissions are structured before you make an offer.

3. Withholding Information

Many buyers make the mistake of withholding personal and financial information from agents. They may be embarrassed about how such information will make them look, they may be afraid their agent will take advantage of them, they may believe they already have all the answers, or they may simply think the information is irrelevant. Your agent has a fiduciary responsibility to advise and represent you in the home-buying process, but unless you inform him about your unique situation he will be unable to do that. Make sure to keep communication with your agent open and honest. Don't be afraid to talk to him about any and all of your problems, concerns, or fears.

4. Buying the Wrong House

Even the most prepared buyers can lose sight of their game plan. Too often, the intense personal and financial pressures of home-buying lead people to make decisions they regret. Don't let your desire to save money or your desire for the perfect home distract you from your original plan. That's how buyers end up with too few bathrooms and too high mortgage payments. If you think you've found the right house, go back and review your needs and wants list. Make sure that the house you want is the house you'll get!

5. Avoiding Overpriced Houses

The reasons that buyers tend to ignore overpriced houses are many: they assume that sellers overprice houses intentionally, that low-ball offers will only offend them, and that other buyers have already made such offers and been rejected. Above all, buyers assume that overpriced houses that have been on the market for too long have something wrong with them (other than the price). Strange as it sounds, overpriced houses can be great opportunities in disguise. Don't be afraid to submit low-ball bids for these houses. Sellers who list their houses at too high a price eventually realize their mistake; often, getting them to accept a lower offer is merely a matter of timing. Talk to your agent about the DOM (days on market) for each house you visit - make sure to include this information in your considerations.

6. Credit Purchases Prior to Closing

A mistake we see buyers making time and again is the purchasing of other items on credit in the days and weeks prior to the closing. Even a small credit purchase can change the nature of your mortgage arrangement. It may seem obvious to say that larger, expensive purchases (cars, for example) may cause underwriters to revoke your pre-qualified loan status; what is less obvious is that smaller, last-minute purchases - major home appliances, furniture, computers, even lawn-care equipment - can create the same problem. As a rule, purchase nothing on credit in the period before closing on your new home.

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