Top 10 Biggest Home Buying Mistakes #7-5

Home Buying Mistake #7 - Buying at the Top of Their Price Range

There's a term that all buyers need to take to heart when they are looking at and considering homes. That term is 'house poor'. John F. Sullivan, Vice-President & Associate Broker of Buyer's Edge Co., Inc. told us that one of the biggest mistakes buyers make is, "buying a home at the top of their approval level instead of at the comfort level. In my experience there is usually a gap between the two levels. In many cases the full approval level will make the buyer house poor, unable to afford much other that their mortgage payment and necessary recurring expenses. No money for recreation makes for unhappy home owners."

How to Avoid Making this Mistake: It pays to be conservative when you're shopping for a home. Use your pre-approval amount as a measure for what would max your finances out. Explain to your agent that you aren't comfortable being maxed out and to not show you houses that are at the pre-approval amount.

How to Recover if You Made this Mistake: If you already own a home that is making you 'house poor' see what you can do to refinance. With rates as low as they are today refinancing could make a huge difference. If you're in negotiations on a home already try to get a lower price on the home by making other concessions such as agreeing to not ask the seller for repairs.

Home Buying Mistake #6 - Not Reading & Understanding Contracts Thoroughly

Real estate contracts can be complex and it's a huge financial obligation that you're entering into when you sign a contract. An agent can explain different parts of the contract to you but that doesn't mean you should read every line and ask questions. You should know what each portion pertains to, how it will affect negotiations. and how it's going to affect your purchasing and ownership of the home.

Michael Garard, GRI at Garard & Associates, LLC, pointed out that you also need to know when you're a mistake by not adding verbiage to the additional provisions that helps the buyer's protection.

How to Avoid Making this Mistake: The answer here is easy, read every page of the contract. If you don't understand a portion then ask your agent to explain it to you. That's part of their duty as your agent.

How to Recover if You Made this Mistake: Not reading and understanding a contract thoroughly is a mistake that can get buyers into the most trouble. Unfortunately, most contracts are binding and it's your responsibility to make sure that everything is accurate and to your liking before you sign. Try to discuss any issues with the other party to see if they are willing to rework the contract.

Home Buying Mistake #5 -Buying Based on Emotions Only

Buying a house can stir up a lot of emotions, which is to be expected. It's likely the biggest purchase you'll ever make and it will be the place you call home. But getting too emotional can cost you a lot in the long run. Craig Delsack, a real estate attorney at the Law Offices of Craig Delsack, LLC, has seen a lot of home buying mistakes and this is one of them. He says:

How to Avoid Making this Mistake: Get a real estate agent. They are market specialists whose business savvy can balance the emotional investment you've made in buying a home. An agent will point out all the pros and cons in a house looking at it from a business/investment perspective.

How to Recover if You Made this Mistake: If you've already fallen in love with a home, let your agent take the lead throughout the negotiations. They are professionals that are trained to approach a purchase as a business transaction. 

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