Home Buyer Mistakes and How to Avoid Them
Buying a house is not something people typically do very often. It’s one of these things that most people only do a handful of time in their life. Every day, home buyers, wether buying their first home, or 2nd/3rd, venture into the market and often rely only on information gathered from family and friends or from their past experience. Real estate is a fast moving, constantly evolving & changing process that depends on many moving parts. Here are a few simple tips to get you started or refresh your mind in your home buying adventure!
Speak to a lender
It’s more fun to look at homes than it is to talk about your finances with a bank/lender. Many home buyers do just that. They visit homes and properties before finding out how much they are able to afford. The excitement of the “hunt” quickly turns into disappointment when they discover they were shopping in the wrong price range or when they aren’t able to make a serious offer.
There are many different types of mortgages and lenders. Always check with multiple lenders and shop around for the right type and right rates as they may vary from bank to credit unions, to private lenders. Places like Rocket Mortgage offer articles and resources to navigate this complicated finance world.
Cost of homeownership
The initial price of a home is what most buyer think about. But after you buy a home, the monthly bills keep stacking up and catches many people by surprise.
“It’s not just your mortgage payment,” says Seth Feinman, vice president of Silver Fin Capital, a mortgage brokerage in Great Neck, New York. “You’re going to have the oil bill, the gas bill, you’re going to have a cable bill, you’re going to have all these things that the bank doesn’t care about when qualifying you for a mortgage.” For Florida homeowners, the constantly evolving and increasing insurance crisis is another factor that is affecting everyone in the state.
How can you avoid surprises: Find a real estate agent who is knowledgeable & can tell you how much the neighborhood’s property taxes and insurance typically cost. Asking to see the seller’s utility bills for the last 12 months the home was occupied can help predict some of that cost.
Depleting all of your savings
Unless you’re buying a new home, it almost inevitable that you will come across unexpected expenses & repairs. Maybe you’ll need to replace a water heater, repair drafty window, a malfunctioning appliance, fix leaky plumbing, get rid of hidden mold, or other surprises that come from buying home. Which will shortly bring you to our next bullet #4…
Putting all your savings in the down payment for your new home and not giving yourself a buffer could be disastrous. If you don’t have enough in reserves/savings, emergency funds, one can find themselves in a hole quickly. Resources like Nerd Wallet recommend keeping 2-5 months worth of emergency cash for such events as repairs or loss of income.
Not getting a home inspection
Although here at Spyglass Home Inspections, we may be a little bias on this part. It’s a mistake to buy a previously owned home (and arguably even brand new ones) without an inspection. Many components make up a home, all of which must be maintained to last. We often see sellers try to do last minute “sprucing up” and instead of fixing problems they simply cover them up. We also often see new build contractors try to cover things up instead of fixing them the right way. These cover up can quickly and easily become huge headaches & potentially expensive hidden damages.
In competitive markets such as what we have here in Florida, a lot of buyers compete for a small number of properties for sale. Buyers can be tempted to waive a home inspection. Believing that it gives them a competitive edge over other buyers. But the smarter buyers wouldn’t dream of forgoing an inspection before investing their hard earned money on a home.
By hiring Spyglass Home Inspections you are hiring an InterNACHI Certified Professional Inspector and a professional Firefighter who has a keen eye to find potential problems before closing on a property! Book us now by clicking HERE
Underestimating renovations
Home buyers are frequently surprised by high repair/renovation/remodeling costs. Two mistakes often made: First, they get a repair estimate from just one contractor, quality & cost of house renovation varies greatly! Second, with the popularity of “reality TV shows” and HGTV type real estate shows which make renovations look faster, cheaper and easier than they are in the real world. We recommend that you assume that all repair estimates are on the low end.
ALWAY seek multiple estimates for extensive repairs and/or remodeling.
A good real estate agent should be able to give you referrals to contractors who can give you estimates. But also seek independent referrals from friends, family and co-workers so you can compare those estimates against ones you receive from contractors your agent refers.
Not sure where to begin searching? When getting a home inspection from Spyglass we can offer an added service through a partner program Repair Pricer which will use information provided from our inspection and price out the potential cost of repairs and renovation the house may need!
