Biggest Mistakes When Homebuying
Posted by David Rosenfeld on Nov 21, 2012 - 7:39:09 PM
LOS ANGELES—Nobody said buying a home is easy. With all the complexities of the buying process, it’s not surprising that some home buyers end up paying more than they should because they weren’t careful.
In today’s economy, every dollar counts so even seeming small mistakes on the part of the home buyer can end up costing them dearly.
A common mistake for buyers is to judge a property for its appearance. By only looking “skin deep,” you’re only seeing just a fraction of the total picture when you see a property. And it’s understandable. We all can get excited about a home and in turn become enamored of a property that may well have serious issues that would be too costly for the new buyer.
I recall taking a client to a home that was well kept, but needed some paint and some repairs here and there. But its services, meaning gas, electric and water systems were all upgraded and brand new. It seemed nearly ideal for this buyer. But when I took the client to a nearly identical home just two blocks away, they immediately fell in love with it. It had vintage cabinets and doors and was extremely well kept and looked like a model home. But its services were old and were never upgraded. This home cost more than $200,000 than the other home.
Nonetheless, the client opted for the nicer-looking home. The costs for the needed upgrades would be steep, but it is the price they paid for the prettier home.
Letting emotions get in the way is a common mistake that home buyers should keep in mind.
What could be a nice cozy home with its small rooms and seeming picture perfect appearance could well turn out to be a not-so-perfect once you start bumping into each other. Be realistic in your approach to home buying and assess your needs well before taking the plunge.
Although home inspectors can be expensive, they are a necessity in the buying process. A potential homebuyer should not take the role of inspector just to save on the cost of a real professional. Examining all the potential problems of a home is not as easy as it sounds. Learning that you have a leaky water main could cost you thousands is as important as learning that your 50-year-old water pipes are about to fall apart at any moment.
It’s also important to ask for an insurance report to learn whether the home has had serious problems in the past that could recur.
Moreover, learning that your new home is too close to railroad tracks and loud freight trains that regularly rattle the neighborhood is just one of many issues that could have been avoided with proper research and inspection.
Another major mistake with many is embarking on a home buying quest without learning if you can qualify for a loan for your dream home. It’s a tough economy and finding financing is tougher than ever though not impossible. While you may not qualify at first, you can always try again with other lenders or down the road.
Make sure you’ve put some money away to help take care of the down payment and get rid of unnecessary credit cards to improve your credit rating and your chances of getting financing.
For novice homebuyers, don’t take on a fixer-upper that needs a lot of work unless you know you can afford the repair costs and that you’re handy with tools yourself. You don’t want to end up living in a home in constant disrepair for the foreseeable future.
Let’s face it, buying a home is a big deal and any decision you make should be made after much careful thought and research. Engage your real estate professional and ask him questions if you’re curious about a property. Use his expertise and judgment as well as your family’s input and needs before making a decision.
David Rosenfeld is a Real Estate broker and president of Advantage Real Estate, a Real Estate and investment firm in Santa Monica, and a Rotary Club member. He has more than 20 years experience in commercial and residential property investments and financial counseling.