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Nine Foolish Home Buying Mistakes and How to Avoid Them

Historically low interest rates and the certainty that they will only increase, make a lot of people believe that they need to buy a home now. Only you can determine if the timing is right. If it is, remember that purchasing a home is a major financial decision and there are many ways to trip up. Here are some tips that will show you how to buy the best home for the money.

 

First things first:

1. Check your Credit Report and Fico Score: The best interest rates go to those with the highest Fico score. Review your credit report first to make certain that the information is correct. If there are items to dispute now is the time to do so.

2. Get Preapproved: You will need a preapproval at the time your Realtor® presents your offer, so you might as well take care of it now. As this process can easily take several days, waiting until you find the perfect home, may cause you to lose out to a buyer who is better prepared. What you can afford and what you qualify for, are often two different numbers. Why waste your time looking at homes out of your price range? Getting preapproved now saves time and disappointment. It’s not fun to fall in love with a home only to find out you can’t qualify for the mortgage.

3. Be financially savvy: Continue to save money while you are looking. Live as if you are making a mortgage payment and sock the difference between your rent and your anticipated mortgage payment in the bank. Don’t buy a home if you’re planning on selling in the next five to seven years. Buying and selling are expensive and it’s certainly not fun to move. Try to buy as much home as you can afford and be sure to purchase a house you will love coming home to. Don’t spend all your savings on a down payment, keep some in reserve. Everything in your home has a life expectancy and you need to have a cushion to cover those unexpected repairs.

4. Work with an experienced Realtor®: The seller pays the commission to both their agent and the buyer’s agent. There is no benefit to you in working with an inexperienced Realtor®. In addition, look for an agent you like and will enjoy working with. Your agent should be quick to respond to your emails, calls and texts. Ask friends, and relatives for recommendations and be sure to check their online reviews on sites such as yelp. And remember, if it’s not a good fit, move on.

Now that you are prepared, don’t forget:

5. Be realistic: You probably won’t get everything on your dream list. Certainly the things that can’t be improved upon are a must: location, school district, and lot size. Updates and sometimes even square footage can be addressed over time.

6. Get everything in writing: Don’t assume the refrigerator, washer and dryer are included with the sale. Built-in stoves stay but unless agreed to in writing (typically in the purchase contract) anything that is not attached does not come with the home.Have the home inspected by a professional: Don’t think a run through by your handy uncle or a contractor can take the place of a thorough home inspection. Ask for recommendations from your Realtor® and people you know who have recently purchased in the area. Talk to several inspectors, ask questions and hire the one you like best. Likely the inspector will recommend additional inspections, take their recommendations seriously.

7. Don’t forget resale: If you do opt for the larger home across the street from the freeway, be forewarned that the resale value may not be as strong as a smaller home in a superior location. After your purchase, consider future resale for those expensive home improvements.

8. Bold splashes of color are best enjoyed in paint which can be easily changed. Neutral colors are a wise selection for countertops and other hard surfaces (such as sinks, tubs and flooring).

9. Plant fruit trees: Trees can take years to produce fruit but are well worth the investment. It is convenient, satisfying and cost effective to have your own garden and fruit trees.

It’s often easier said than done, but try to live within your means. Over time your home can be a wonderful investment, don’t treat it as your personal ATM machine.

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