1. Not doing your homework.
Knowledge is power. Tremendous information is available on the Internet. There is no excuse for entering the market unprepared.
2. Choosing a lender just because they have the lowest rate.
While the rate is important, consider the total cost of your loan including, loan fees, discount and origination points. When receiving a quote from a lender or broker, insist that the discount points (charged by the lender to reduce the interest rate) be distinguished from origination points (charged for services rendered in originating the loan).
3. Making verbal agreements.
If you're asked to sign a document containing instructions contrary to your verbal agreements--don't! For example, the seller verbally agrees to include the washing machine in the sale, but the written purchase contract excludes it. The written contract will override the verbal contract. More importantly, your state may require that contracts for the sale of real property be in writing. Do not expect oral agreements to be enforceable.
4. Not getting two important contingency clauses in the contract.
When making an offer, a wise home buyer asks for two important clauses -- a mortgage financing contingency and a professional inspection contingency. These could save a lot of money and grief.
The mortgage financing contingency clause saves you if the home doesn't appraise for the offered price. You can cancel the sale and renegotiate the price or get back your deposit.
The second clause hinges the deal on a professional inspector OKing the house. If the inspector discovers hidden flaws, structural damage or faulty systems, the wise home buyer may want to renegotiate or back out of the deal. An even wiser home buyer goes through the house with the inspector to learn any concerns the inspector has.
5. Falling in love with a particular property
If you think a house is ideal, don't let the seller or any of the seller's agents know. If the seller finds out you're in love with the house, the seller could hold out for a higher price.
A wise home buyer knows there are lots of houses -- and there's one out there that's the right house at the right price. It's not a dream house if the payments are a nightmare. If you can't afford it, move on and keep looking.
6. Buying a house that is tough to resell.
Many home buyers stay focused on finding a home sweet home where their families will be happy and safe. You should also remember this is also a big financial investment. Take a moment to look ahead to the day you'll sell the house. Knowing the neighborhood and paying attention to marketable details of the house will go a long way toward preventing a buying mistake.
7. Trying to make a shrewd investment.
People need to buy based on what fits their family. Don't try to guess what will happen to the market.
8. Overlooking an inferior floor plan for an attractive exterior.
It may have gorgeous curb appeal, but you don't live on the lawn. No matter how attractive the exterior, you need a livable home.
9. Choosing a poor location.
Even within a neighborhood, location matters. Is it on the busiest street? Is there a shopping center out the back window?
10. Not buying at all.
If you can afford a home and you don't make that purchase, you'll lose the benefit of tax deductions, building home equity and the appreciation in value.
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