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Mistakes Homebuyers Make
Springtime weather encourages daydreaming—just as it encourages homebuying. But trying to acquire a fantasy lifestyle through a home purchase is often folly, real estate experts emphasize. “You can try to buy the dream, but you have to live the reality,” says Dorcas Helfant, a realty executive and former president of the National Association of Realtors.
Are you part of a harried, two-income couple who work long hours in the city, yet imagine a romantic life on a five-acre estate far in the country? Do you picture yourself sipping drinks around an oversized pool after work?
Well, don’t allow the flowers and birds of spring to let your imagination convince you to buy into a pastoral lifestyle—unless you truly have the money or will to maintain it, Helfant cautions.
“What’s going to happen when the pool crew doesn’t show up? Who’s going to cut the grass when it’s up to your knees?” she asks.
Trying to obtain an impractical lifestyle when buying a home is one of the six most common errors homebuyers commit. Here are five others:
No. 2: Making a sudden U-turn in lifestyle.
It’s not only happy fantasies that make homebuyers veer off course. A personal crisis can also prompt people to select the wrong house, says Rosemarie Rhyne, an agent for the Prudential real estate chain.
Have you recently become separated, divorced or widowed? Then—suffering from the grief reaction that comes in the immediate aftermath of your personal calamity—you could be prone to purchasing property that’s inappropriate for you.
Now that you’ve become widowed, are you tempted to make an immediate move from your single-family home into a much smaller and less expensive town house?
Both financial and personal pressures encourage you to make a hasty change. But Rhyne—who worked as a therapist before entering the real estate business—suggests you wait at least a year after becoming widowed or separated before making a radical change in your housing.
Taking a boarder to share the expense of your single-family home could buy you time to explore whether you really want to move to a town house—giving up a long-cherished detached home with large windows all around.
No. 3: Seeking to buy another home without first selling your current property.
The temptation to stalk the right trade-up property before you find a buyer for your old place can be overwhelming. After all, you reason, you want to be certain the grass on the far side of the hill is truly greener.
But unless you sell your current place before trying to grab a new house, you could find yourself in a bad bargaining position, says Helfant. Timing could force you to sell your old home at a discount—giving up your chance at the move-up property you’ve selected.
At the minimum, you should have your present home in market condition before you go shopping for another one.
No. 4: Finding a house before seeing a mortgage lender.
“In the majority of cases, people first find the property and then try to smash the loan into the property,” says Julie Garton-Good, author of “All About Mortgages: Insider Tips to Finance the Home,” a book by Dearborn Financial Publishing.
All too often, homebuyers commit to the purchase of a property before they’ve been to a mortgage lender to calculate exactly what they can afford. And, failing to become “pre-qualified” can lead to disappointment, Garton-Good says.
“Unless you get your ‘reality therapy’ before you select a home,” she says, “you could have to fall out of love with the property you’ve found.
No. 5: Refusing to consider purchase of a home with a dated decor.
“Sometimes people can’t see past the decorating that’s been done,” says Rhyne, the Prudential agent.
The fact is that many people can’t see the potential of some fine properties because of old paint, tired carpeting or dated appliances. “People like all-white kitchens. So they walk into the kitchen of a house with harvest gold appliances and then walk right out,” she says.
Looking beyond the obvious, you could see that the house with the gold appliances may also have spacious bedrooms and fine hardwood floors underneath threadbare carpets. And smart homebuyers know that since so few can see the potential of a house with dated decor, such a diamond in the rough can be a very good deal.
No. 6: Bringing in an amateur home inspector.
Buying a home can be such a costly proposition that many try to cut corners on the expense of home inspection.
“People say, ‘We’ll get cousin Fred or Uncle Jake to do the home inspection,’” says Helfant. A well-meaning amateur may be skilled in understanding one or two home systems. But it’s unlikely that he will have the breadth of knowledge necessary to evaluate all the systems in a property—as could a high-quality professional inspector.
“Uncle Jake may know about the heating, but not the electrical system,” Helfant says.
Disclosure laws designed to protect homebuyers are becoming more stringent in most parts of the United States. A homebuyer stands a better chance of being told about a leaky roof now than you would have in previous decades.
Still, it’s far better to invest in a thorough home inspection from an independent source than to rely on the candor of the seller or his agent. And discovering hidden problems early can allow you to renegotiate the terms of your deal or back out if the problems are serious, Helfant points out. “Trying to save money on a homeinspection is false economy.”