8 Top Home-Buying Mistakes (& How to Avoid Them)

home buying mistakes

When my husband and I bought our first home, my boss at the time said, "Well, I hope you've got another $10,000 socked away because the minute you sign on the dotted line, everything breaks."

What a killjoy, I thought. Until ... his prediction came true. Within days of closing, our basement flooded. Weeks after that, our furnace stopped working. A month later our pipes burst. I could go on and on! 

Because we were first time home-buyers smitten with the charming front porch and fenced-in yard, we overlooked a lot of things we shouldn't have. 

We're not alone. Often, what starts out as a quintessential part of the American dream turns into a costly nightmare. More than just a place to raise your children, your home is a long-term financial investment, probably one of the largest you'll ever make, so it's imperative that you really stop and think before you dive right in.

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Buying and selling a home can be pretty overwhelming. From packing boxes and picking a new neighborhood to choosing a realtor and figuring out how to get from point A to point B, there are plenty of moving parts (pun intended) to consider. 

And at the end of all that hard work, you want to know that your new home is a great fit for you and your family. 

The following are 8 top mistakes home-buyers make, according to Weichert and Coldwell Banker realtors: 

1. Don't overspend on your first home. There's more to it than just a monthly mortgage payment. Additional costs, like taxes, higher utilities, lawn care, and home maintenance expenses, such as gutter cleaning, furnace maintenance, and other repairs, are often overlooked.

Instead: Stick to your budget -- a realistic budget -- and set aside some emergency funds. Life events you can't prepare for, such as an unexpected illness or lay-off, can send you spiraling into debt if you don't have some money set aside, notes Miriam Caldwell, personal finance expert.

2. Don't hire the first inspector in the phone book. Choosing a reputable home inspector can save you a bundle down the road. 

During a home inspection you can learn about any issues including mold, termite, or foundation problems that may prevent you from wanting to buy the home. If a big red flag pops up, like a new roof is needed ASAP, you can try to negotiate a lower purchase price.  

Instead: Research reputable inspectors in your area and rely on the recommendations of others. Your realtor may be able to provide a list but be sure to do some investigating on your end as well. Looking at online reviews can offer insight and save you time and money.

3. Don't discount a home because you don't like the decor. When we were house-hunting, I let a lot of well-priced, spacious homes slip away because I couldn't get past the lime shag carpet in the living room or hot pink walls in the den. Not being able to re-imagine it really limited our choices. 

Instead: Consider simple changes like paint and wallpaper, and removing or replacing carpeting, which can make all the difference.

4. Don't buy a home because you LOVE the decor. Let's face it: The furniture and the accessories belong to the sellers. Try to envision what the rooms will look like bare. Do you still love it? If not, keep looking!

Instead: Look at a home for its flow, the room sizes, its storage space, its potential for expansion. 

5. Don't think you can do all the work yourself. "First-time home-buyers often bite off more than they can chew," explains Trish Ollom of Weichert. "It takes time and money to make improvements."

Instead: Set realistic expectations and do things right the first time. Enlist the help of a stager or redesigner to guide you in choosing which projects to do first and what components to focus on. Make a wish list and prioritize it, while keeping things like safety, savings, and budget in mind. 

6. Don't look for houses if you have one to sell. Sure, it's fun to check out open houses, but if you want to be taken seriously as a bidder, you need to be able to show that you can come up with the funds at closing time -- and that you're really serious about buying a new house and moving soon.

Instead: Put your house on the market first, then start your hunt.

"This puts you in a much better position when you find that perfect home," Ollum notes. "Many sellers will not entertain an offer with a home sale contingency." 

7. Don't forget to check out the neighborhood and research local schools. You may have fallen in love with the house itself, but what about the rest of the 'hood? Think about what's important to you. Do you want to be within walking distance of the town or mass transit? Or would you prefer a quiet area set apart from traffic or businesses? Do proximity to parks and schools matter? Is it a town with sidewalks or do you have to drive everywhere? And very important for moms: Are the schools good and would you want to send your kids to them?

Location is also key when it comes to resale value, according to Realtor.com. While easy access to schools and shopping can help a home retain or increase its value, a high-traffic area can make for a challenging resale. 

Instead: Take in the whole town. If you plan to send children to the local schools, do some digging. Find out how they rank and don't be afraid to ask your future neighbors for their thoughts on living there. See how close you are to parks, shopping, and restaurants. Having all of that conveniently located and knowing about it ahead of time will be a huge help when you're getting settled.  

8. Don't forget to factor in the cost of homeowner's and flood insurance if you're in a house that needs it. This is so important for all homeowners to consider, not just those with beach- or lake-front properties. You can actually view your potential new community's flood hazard data online if you're unsure about whether you might warrant it or what the risks are.

Instead: Treat the extra costs for any house-related insurance as part of the sale price and mortgage and make sure you have the most up-to-date figures and zoning information -- a real estate lawyer and some of your own research online should help -- before you make the decision to buy.

Have you made any home buying mistakes? What was the biggest?

 

Image @ArielSkelley/Corbis

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