Avoid these snafus to enjoy your own personal dream house while still being able to afford dinner.
Buying a home takes a lot of work. It causes nightmares. It gets competitive. And it is a huge investment. It might actually be the biggest investment a person makes in his or her entire life. That’s why it’s not something that can be done in a day or even a week—sometimes it takes several months. To help you through one of the most important decision making times in your life, ESTATENVY sat down with Adam Pycz, a real estate broker at Exit Strategy, to provide insight on five home buying mistakes to avoid.
Looking at Homes Before You Get Pre-Approved
It’s hard to know what you can afford before making a stop at the bank. Everyone has a dream home, but until a pre-approved budget is in place, it’s important not to get your hopes up. Be realistic with the search and don’t start looking until you know what is realistic.
“A $500,000 home is always going to appeal more to a buyer than a $300,000 home,” Pycz said. “Know what you can afford before going out so you won’t have to deal with the emotional roller coaster of being eventually outbid.”
Maxing Out Your Budget
The minute you find out your pre-approved budget, it’s easy to scan the pages of Redfin, Zillow and Truila, glancing at mega-mansions and justifying not eating for a year to be able to afford a sizeable down payment that pushes your budget to the max. Sure, the kitchen has stainless steel and the on-suite has two sinks, but can you really afford it?
“Don’t spend the max of what you have been pre-approved for. Nobody wants to be ‘house poor,’” said Pycz. “You need to save room for other expenses that occur over the time period of owning a home.”
Things happen after homes are purchased and issues start coming out of the woodwork, literally. Save some space in your budget so that when these issues inevitably happen, it’s not the end of the world.
Not Getting a Home Inspection
It’s hard to know what is going on behind the walls of a home without getting a thorough inspection. We have all seen Jonathan Scott come to the blissfully oblivious couple on Property Brothers with a laundry list of issues in the home they just spent a big chunk of their savings on. Before signing on the dotted line, know exactly what you are getting yourself into.
“If you are planning on spending hundreds of thousands of dollars on a house, don’t waive a $300 home inspection,” said Pycz. “A lot of things can come out of those inspections and saving the little amount of money in comparison to the overall investment is not usually a good idea.”
Listening to Outsiders
“I see it all the time. People fall absolutely in love with a home and then bring their mother or father to a walk-thru and it kills the deal,” said Pycz. “Listen to your heart and try to shield yourself from being swayed by outside opinions.”
When it comes to buying a home, it is important to trust your gut. As an outsider, it is hard to know exactly what a homebuyer is looking for in their prospective home.
There is an exception to this rule, however.
“If your parents are ‘gifting’ you money or a home, make sure they come along for all of the showings from beginning to end,” explained Pycz. “When other parties’ money is involved, there is more room for opinion on the end result.”
Not Using an Educated Broker
It is not an uncommon feeling that there are too many brokers to choose from. While they might be lined up around the corner to help you with your search, there are ways to narrow down who is the best fit for you.
“Use someone who has quite a few homes under their belt. They are there to help you through the entire process, from the negotiations to the closing, and to provide answers to all of your questions,” said Pycz. “You also want an agent that always has his or her phone on them. It’s possible to lose an offer within an hour of unresponsiveness, so it’s important to find someone who is going to cover all of their bases.”
Buying a home is a tedious process. Thankfully, it typically is a decision that only has to be made a handful of times in a lifetime. It is easy to get caught up in all of the different options, numbers and finishes, and before you know it, you are in too deep. By avoiding these five home buying mistakes, home buying will be a breeze—for the most part.