13 Costly Mistakes to Avoid When Buying a Home

Home buying is an emotional process. For most people, owning a home is one of the biggest achievements they’ll ever make. If you’re buying a home for the first time, emotions may overwhelm you, and you may make critical mistakes that might prevent you from achieving your long-awaited dream. 

To avoid falling prey to these mistakes, consider controlling your emotions so that you can make the most rational decision.  As a home buyer, you must understand some of the common mistakes other homeowners make when house hunting.

Here are 13 costly mistakes to avoid when buying a home.

Costly Mistakes to Avoid When Buying a Home

1. Outspending Your Budget

The most critical factor to consider when looking for a home is your budget. Once you identify a suitable home, excitement may prevent you from feeling the need to do the math before deciding to buy the property. 

A common mistake people make when buying a home is knowing it costs more than they can afford and still buying simply because they like it. Buying a home that you can’t afford will see you taking out a mortgage. A bad idea! This is like dropping a missile or an atomic bomb on your finances.

Overspending your budget wipes out other financial goals you may have had. You’ll have to say goodbye to that vacation you’ve been waiting for. You’ll even find it hard to pay your bills or put food on the table. Yes, you need a home. However, don’t let the desire leave you in a financial mess!

Once you identify a potential home, determine your budget to avoid spending more than you have planned. Don’t concentrate solely on the deposit and purchase price. 

Factor the extra charges that you’ll probably encounter along the way, and include them in your calculations. For instance, besides the home’s buying price, you may be required to pay the solicitors’ fees, stamp duty, survey, and removals. 

If you don’t include these things in your calculations, you’ll encounter financial shortage, or face some nasty shocks further later.

2. Not Using a Real Estate Agent

When shopping for your dream home, ensure you have a broker or a real estate agent. These professionals are guided by the ethical principle of acting in both the buyer’s and seller’s interests. Not using an agent puts you in a risky bargaining position.

During the selection process, examine their qualifications to avoid working with the wrong agent. Find a qualified and experienced agent who has worked extensively for many years. Such professionals know how to help buyers find a home that fits their physical and financial needs. 

If your agent pushes you to spend more than you can afford, look for a different one.

3. Choosing Desires Over Needs

This tops the list of costly mistakes to avoid when buying a home. As a first-time homebuyer, you may be tempted to choose a house because it has an oversized garage or an extra living space. Before these things influence your purchase decision, determine whether you need them.

Choosing wants over needs may make you buy what you don’t need. Before looking for a home, make a list of your must-haves. Refer to this list when examining a home. That way, you won’t spend much money on unnecessary things.

4. Overlooking the Current Market Trends

Markets are ever-changing, and their dynamic nature means that home buyers should always be aware of their current state. Find out the current market conditions to know how to act at that particular time.

Property markets are more stable than any other form of investment. Yet, it’s prudent to bone up on their current performance in your area. 

Being aware of the property’s current market climate will help you decide whether to buy a home at that particular time or wait until the situation allows.

5. Focusing on Online Search Only

Most first-time home buyers (and some repeat buyers) forget that the search doesn’t start and end online. The internet can be a brilliant resource for anyone looking to buy a home, but its convenience can create a severe problem for the homebuyer. 

When looking for a new home to buy, searching it online may tempt you to stick to the big two or three portals. This is a costly mistake people make when buying a home.  If you follow the same suit, it might make you miss out on far better opportunities.

Look for an independent real estate agent with local knowledge of the area that you’re interested in. Also, seek recommendations from reputable estate agents in your area of choice, and choose one who will help you get the right home at the right price.

6. Overlooking Mortgage Options

Shopping around for mortgage quotes may seem time-consuming. It involves speaking to professionals and providing financial documentation. To quicken the process, you may overlook the available mortgage options and simply jump at the first loan offer you come across.

When looking for the best mortgage option, it’s important to shop around first. Your first quote may be time efficient but cost-inefficient. 

Compare different mortgage options because you might find a lender who will offer you a deal that will save you money over the lifetime of the loan. Get multiple quotes to identify a lender that offers a mortgage with the best rates and terms.

7. Skipping Pre-approval

Shopping for a home without getting pre-approved is one of the top house-hunting mistakes people make, and you should avoid it at all costs. Getting preapproved benefits you in several ways. 

If you’re a first-time homebuyer, it’s the most accurate way to determine how much you can afford. Besides, home buyers who get pre-approved through mortgage lenders have reliable price ranges to stay within. This prevents them from setting their sights too high or budgeting beyond what they can afford. 

Additionally, being pre-approved makes you appear serious to the sellers.

8. Foregoing Home Inspection

When you make a home offer, it’s advisable to make it dependent on the home inspection. It’s even one of the mortgage terms by some lenders. While buying a house without a loan does not require you to inspect the home, skipping this step may cost you a lot of money.

To avoid unnecessary stress, find a certified home inspector to check the home’s condition. The expert will review the structure, electrical, plumbing, interior, and exterior elements of the home and provide you with a report detailing every issue they find. 

A home inspection helps you avoid major repairs once you assume ownership of the new home. For instance, it will save you from buying a house that requires a new roof.

9. Sending Someone to See the House on Your Behalf

Video tours can give you a glimpse of the house you want to buy. However, they omit essential details required to help you make the right decision. For example, you won’t detect a home’s noises or strange smells via a video.

Instead of conducting a video tour, send a friend or family member to view the home for you, especially if you intend to buy the home outside your area. 

Ideally, it’s prudent to visit and view a home yourself because what may appeal to someone else may not appeal to you. If you commit to buying a home without viewing it yourself, you could end up with a property you aren’t happy with, or one with unexpected problems.

10. Draining Your Savings

Buying a house is costly, and saving enough for the down payment and closing costs alone will take you a lot of time. When saving to buy a home, save beyond what the buying process needs.

Spending all of your savings can lead to financial suicide. If you spend all your savings on buying that dream home, you won’t have any cent to cater for hidden and unexpected homeowner costs. 

How much should you have before deciding to buy a house? Here’s a list of expenses you should save for:

• Down payment
• Closing costs
• Homeowners Insurance
• Property taxes
• Utility bills
• Moving costs
• Homeowners Association (HOA) fees

Ensure you can afford your dream home without depleting your savings.

11. Buying a Home When You’re Already in Debt

One of the costly mistakes to avoid is buying a home when wading into debt. Debts have weighed many home buyers down. When spending thousands of dollars on debt repayments, you’ll find yourself saving for the down payment all your life, or rather, taking a bigger debt for the home. 

Taking a home mortgage when you’re already in debt will put you one emergency away from being unable to pay any of your mortgages. 

12. Rushing to Make an Offer

Never rush to make an offer regardless of how great a home seems on the surface. Remember that making an offer serves as a commitment to pay for the property. Be 100% sure that you’re satisfied with the house before making an offer.

13. Ignoring the Neighborhood

A key factor to consider when looking for a home is the neighborhood. If the neighborhood isn’t appealing, it might be hard for you to enjoy the new home. 

When studying the neighborhood, here are some of the questions you should ask:

• Is the neighborhood safe?
• What activities does the community offer, and do you enjoy them?
• What do the neighbors do?
• What developments are being planned for the area?
• What are the school ratings?
• What about crime statistics?
• What’s the proximity to amenities like entertainment and restaurants?
• What are the zoning laws?

If you’re happy with the answers, buying the home will be a perfect deal. Remember that neighborhood has a huge influence on a property’s resale value. So, don’t overlook the neighborhood surrounding your dream home.

Final Thought

Home buying is both an exciting and stressful process. It involves several steps, and there are plenty of pitfalls waiting for those unaware. 

Fortunately, with this article, you’re now knowledgeable about the costly mistakes to avoid when buying a home. The advice contained in this article will save you from a whole lot of stress and heartache, and you’ll buy your new home with a minimum amount of fuss.