3 Common Mistakes, And How To Learn From Experience

 

Mistake #1:  "We can't afford it."

 

Buying a home, in today's economy, is easier than ever.  Home ownership has never been higher and lenders are making it easier every all the time.  Many people are, cautiously, concerned about how much house they can actually afford.  This is a wise policy, but one has to remember that nothing stays the same, there are always new mortgage products and different ways of approaching the finance problem.

 

Point 1 - A house is an investment, and one that almost always appreciates.  Your lender will try, as long as your credit rating is not a complete disaster, to work with you.  He wants to have your business and he also wants to make sure that you can meet the payments.  You may have to start off with an adjustable loan, but you will get a loan.

 

Point 2 - Always get pre-qualified.  If a lender pre-qualifies your loan, you have the advantage of knowing exactly what you can afford, which means you can look for a house within your price range and greatly speed up the buying process.

 

Point 3 - Real Estate has always risen steadily, especially during these economic times.  People have started to see their houses as the investment they are.  They tend to stay in their houses longer, put money into improving them and take better care of them.

 

So be realistic in your price range, but don't short change yourself.

 

Mistake # 2: Not hiring a buyer's agent.

 

Buying property is a complex and stressful process.  In fact, its probably the biggest single financial investment one can make.  Unfortunately, the process has become increasingly complex.  Changes in the law, the relationship of buyer to seller and the new financial products make the situation more difficult for the average person to fully understand.

 

If you hire a real estate agent to represent you, and your interests during this process, you are one step ahead in making the whole process easier and more financially safe for yourself.  If the same agent is representing you and the seller, there is an obvious conflict of interest.  By law, the seller's agent must represent the seller, even if such representation hurts you.

 

Likewise, trying to buy a house without your own agent is, equally, unwise.  There are real estate agents, today, who only represent the buyer.  They know how to look for and find just the type of house that will satisfy your needs, and they are paid by the seller through the commission process.  Always have your own representation.

 

Mistake #3: Getting a cheap home inspection.

 

Since your new home will be, probably, your largest single investment, why would you want to have anyone but the best check it out for you?  When buying stocks, you would extensively research the company.  When buying a house, you want someone who will thoroughly check out each and every component of the house.

 

Don't fall for inspectors who offer a $199 or even a $250 special.  Don't rely on an inspection report that is handwritten, merely a checklist or that is given to you right after the inspection is completed.  Choose an inspector who takes his time, at least 3 1/2 to 4 hours for a regular 2 -3 bedroom house.  Make sure that he checks the furnace and water heater, as well as all the appliances by cross-checking their serial numbers for date of manufacture and against product recall lists.

 

Make sure that he is a member of a national, professional organization, such as NACHI.  Make sure that he carries Errors and Omissions Insurance, General Liability Insurance and is bonded.  In Illinois, make sure that he is State Licensed and that he provides his license number to you.  Check out his references and ask to see a sample of his report.

 

Most importantly, pick a home inspector that will take the time to explain and educate you on every aspect of your new home and that will be available to your for any questions that you might have even after the sale is completed.  Above all, hire an inspector that you can trust.