If you are in the market for a home, there are some things you can do to make the journey easier.
In the March issue of Consumer Reports magazine, a survey of real estate agents revealed mistakes some home buyers make. One of the big ones is not taking the time to find the right real estate agent. The wrong person, it seems, can cost you money.
Here are a few other costly mistakes and how to avoid them:
▪ Moving too fast. When you don’t do your homework, you may end up paying too much for a home. Don’t overestimate your understanding of the local real estate market. Take time to look around in one particular area until you understand what homes are worth. Don’t make an offer on the first home you see.— look at lots of homes. If you do make an offer and negotiations stall, don’t be afraid to walk away.
▪ Having eyes bigger than your wallet. Of the agents surveyed by Consumer Reports, 33 percent said consumers underestimate the costs of home ownership. Buying a home doesn’t mean covering only a mortgage. It also meanscovering closing costs and other fees, paying for utilities, taxes and more. If you are planning repairs, be sure to factor that into the price of the home as well.
▪ Getting your credit up. You need a strong credit profile to get the most favorable loan terms. If your credit score is low, or if you don’t know how your credit rates, get your credit reports now. If you see any errors, initiate a dispute.
▪ Not shopping for a mortgage. Don’t just go with your regular bank when you are looking for a mortgage. Consider several lenders (banks, credit unions) and look for national rates online. Consumer Reports cautions that some mortgage brokers may be more focused on selling you a mortgage than getting you the best deal. Get pre-approved for a loan before you shop so sellers will take you seriously.
▪ Skipping the inspection. According to the Consumer Reports survey, not getting a home inspection is one of the biggest causes of buyer’s remorse. You should plan to be at the inspection so you can learn if any costly repairs are needed. You will also get basic information on the home, such as where the electrical panel is and how to shut off the water. A good home inspector can also give you a heads up on repairs that will need to be done in the next few years. Make sure whomever you hire is licensed.