Nobody wants to lose money or wind up in a financial bind. No one hopes to buy a home only to later regret the purchase. And yet, these scenarios occurred frequently enough to contribute to the nation’s current housing mess.
Luckily, it is possible to learn from other people’s mistakes.
Don’t look if you don’t know your target price
You can waste a lot of time if you start looking at homes without really knowing what you can afford. There are many factors to consider when figuring out a price range, including available funds for a down payment, monthly mortgage payment, property taxes, insurance, and other outstanding debts you have. Your Realtor can help you determine your price range by discussing the expenses associated with buying and owning a home.
Don’t forget to factor in the rest of your life
The lender approved you for a huge loan. Pretty exciting. But that doesn’t mean you should borrow that amount. Take a good look at your financial situation and future plans before you proceed. Despite the long list of questions on the loan application, you know your financial situation and future plans better than the lender. If your spouse plans to leave the workforce to go back to school soon, you might want a lower mortgage than what the lender says you can have.
Don’t choose the wrong loan
Despite tighter lending requirements, there still is a variety of loans available. Some of them sound really attractive, too. After all, who wouldn’t want a lower monthly payment or the ability to buy a more expensive home? But dig deeper. The nation’s mortgage meltdown was the result of many people who got in over their heads with loans offering low initial payments but that rose dramatically in a short period of time. That’s not to say that those loans are inappropriate for everyone—just make sure you understand all the options available and choose the one that’s best for you.
Don’t overlook assistance programs
Many homebuyer assistance programs exist out there, and the qualifying criteria vary from program to program. Some assistance programs also have different criteria based on the city or county where you plan to buy. It doesn’t take long to investigate assistance programs, and you could save a lot of money.
Don’t get hung up on small stuff
Negotiations between buyers and sellers can get emotional. Try not to let that happen to you. Sure, it would be nice if sellers weren’t taking the chandelier in the entryway with them, but is that really a deal-breaker?
Don’t expect to have it all
A recent survey showed that 40 percent of Texas homebuyers did not compromise on any aspect of their home purchase. That’s great news … if you’re in that 40 percent. But that means that most buyers did make a concession on the home’s location, size, price, or another factor. You don’t have to set low expectations about your home purchase, but keep in mind that you may need to give a little on one of your search criteria.
Don’t skip a professional inspection
Sure, you can feel if an AC unit is blowing cold air, but do you know how to test it to see if it’s on its last legs? Do you know how to inspect electrical systems, the roof, and the foundation, too? You’re putting a lot of money into this purchase—not to mention the emotional and lifestyle factors that hinge on where you live. You should have a professional inspector take a look at any home you want to purchase. And if that inspector recommends a specialist to further inspect the property, you’d be wise to do so
Don’t assume that all agents are the same Many people think that the terms Realtor and real estate agent are synonymous. They’re not. Only those agents who belong to the National Association of Realtors and pledge to adhere to a strict code of ethics may call themselves Realtors. Your Realtor will look out for your best interests and help you find the home of your dreams while helping you avoid making mistakes you would later regret. Whether you're interested in buying your first home, your next home, or just want to know more about home-ownership in general, I encourage you to check out a couple of great online resources: http://www.texasrealestate.com/ or http://www.har.com/ and for all of your Pearland TX and Northern Brazoria and Galveston County real estate needs, please visit my site at http://www.danfrankrealty.com/. All of these sites offer tons of useful, real estate-related information geared specifically for Texans.
Danny Frank is a local Pearland TX Real Estate expert
My column was also published in the 15March09 edition of the Galveston County Daily News
Buyers not sweating the small stuff is the biggest issue I find. They'll get made about the $200 fridge. They don't want the fridge anyway because it's old and dirty, but throw a fit when the seller wants to take it.