Three mistakes when buying a house
It’s easy to make some really big home buying mistakes that aren’t easily fixed before closing. Sometimes these mistakes can haunt you for several years or even ruin your dreams of homeownership before the deal closes.
Not trusting your financial adviser
Your adviser could be your real estate attorney or your real estate agent. Buyers will have vital information for a variety of reasons, from worrying about how they will be perceived to thinking they have all the answers to simply not trusting their financial advisor.
Real estate professionals handle so many different types of transactions and personalities, it’s likely you’ve heard it all by now. You will not surprise them with any of your problems or worries. Your advisors represent your best interests, and they can’t if you don’t tell them everything they need to know. Also, your adviser is more experienced in handling problems and will have much better answers than you could find on your own.
If you’re feeling scared or feel like you have to back out of the deal, tell your adviser your concerns and listen to their advice. A professional can help you determine if you really need to back out of a deal and can even help you get your security money back, which is the part of the down payment that comes with a purchase agreement.
Alteration of your financial status before closing
Once you qualify for a loan, don’t make any major purchases. Don’t buy a car, washer and dryer, refrigerator, lawn mower or garden equipment, expensive electronics or computers, or furniture for the new home. Slight changes to your financial picture could change your credit ratings enough for an underwriter to write off your loan.
If your loan contingency has expired or been removed, there is a chance that you may even lose your security deposit and lose the house.
Wait until the closing is complete before making any major purchases. The temptation to buy new appliances or new furniture will have to be put off for a few days or weeks. Once the deal closes, go shopping.
Buying the wrong house
If you’re a first-time homebuyer, make a list of must-have priorities for your new home. Find out what the deal breakers are and what you can live without. Dealers are things you refuse to budge on. This list can include the number of bedrooms, a garage, a large backyard, or an oceanfront property. Things You Can Live Without is a list of things you would like to have, but if they are not included in your new home, you won’t be very upset. For example, you’d like to live on a cul-de-sac, have a tree big enough for a swing in your yard, or have French doors to the patio, but if the house you find doesn’t have one or more of these, you’re still happy living there.
Stick to this list.
Don’t get caught up in the excitement of buying a home and agree to buy a home that is more than you can afford. Don’t settle for less than you want because of other factors, like a good neighborhood or a good floor plan.
If you need two bathrooms, don’t settle for one because you will be very unhappy in no time. Never agree to pay more than 10% over your original financial plan just because the bigger house appeals to your emotions. You may be at risk of losing your home within a few months if your mortgage payments are too high.