Buying a Home may be the most expensive purchase of your life. It may be an extremely complex transaction that cannot be easily undone. You must proceed with extreme caution, flanked by experts who have your best interests at heart.
Before you start looking at houses, before you sign legally binding documents, before you put down a large cash deposit, consider the following Buyer Mistakes:
1. Not getting your finances in order before starting.
2. Not getting a Pre-Approval letter from a Mortgage Lender (or a Proof of Funds letter if you are paying cash).
3. Not providing all requested paperwork (tax returns, bank statements, etc.) to the Lender.
4. Not understanding the Brokerage Relationship that you have with the Agent or Broker you are working with.
5. Not having a Fiduciary relationship with the Broker or Agent you are working with.*
6. Signing a "Buyer's Broker Contract" or "Buyer Brokerage Agreement" that does not provide a Fiduciary to you.*
*See an Attorney for legal advice before signing any paperwork. Ask the attorney to explain Fiduciary Relationship.
5. Not understanding your local housing market trends.
6. Calling the Seller's Agent on the yard sign, thinking that they can get you the best deal.
7. Assume that the agent whose photograph is next to the description on Zillow.com or Realtor.com is the Listing Agent.
8. Work with an inexperienced real estate agent, or a real estate agent whose only objective is to close the sale and get the commission.
9. Tipping your Hand during Negotiations. For example, telling a listing agent "I will offer $350,000 - but if I have to, I can go as high as $385,000".
10. Relying on Verbal Statements from the Seller, or from the Seller's Agent.
11. Not understanding what Homeowner's Insurance costs, or what it covers.
12. Not understanding local Property Taxes and Property Tax Exemptions.
13. Relying on the current Property Tax Assessment.
14. Not vetting the Homeowners Association or the Condominium Association.
15. Not thoroughly reviewing Deed Restrictions, HOA Documents, and/or Condominium Documents.
16. Not purchasing, receiving, or understanding a Home Warranty.
17. Not getting a Home Inspection. That includes inspections of the swimming pool, the well, the septic tank, the lawn sprinkler irrigation system, and other equipment.
18. Not getting legal advice from an Attorney, and/or not making your contract contingent upon Attorney Review.
19. Relying on Tax or Financial Advice from someone other than a CPA or qualified Financial professional.
20. Making large purchases on credit, after getting loan pre-approval.
21. Changing or quitting your job, after loan pre-approval.
22. Not getting Owner's Title Insurance.
23. Agreeing to pay certain closing costs because the agent tells you, "That's the custom here".
25. Not reviewing the Real Estate Contract and other forms in advance.
26. Not reviewing the Closing Documents in advance.
27. Fail to allow enough time for contingencies (you wrote in 10 days for Home Inspections, but the local Inspectors are backed up for 3 weeks).
28. You plan to renovate or remodel a property, but you do not contact the Building Department to see if it is permissible.
29. Assume that you will get a great deal because, "It's a Foreclosure".
30. Not having a Real Estate Attorney involved when you buy a Foreclosure or Short Sale.
31. Fail to check with County Zoning for any changes or plans for the neighborhood or area.
32. Fail to plan for additional costs that arise after you move into the house (furniture, window blinds, etc.).
33. Buy a house in a bad location.
34. Buy a house with poor ingress/egress.
35. Fail to get a Crime Report from local police agencies.
36. Fail to investigate the surrounding area and the adjoining properties.
37. View the house during "quiet hours" when the neighbors are at work. You fail to come back after 5:00PM weekdays or on Saturdays when the music is loud and the neighborhood block parties are underway.
38. Not talking to the neighbors. They may know things that will send you away!
39. Fail to understand that you are buying LAND, with improvements upon it. Those shiny commercial appliances in the kitchen will become used appliances after you move in. The house may settle and crack over the years. The roof will be gone in 15, maybe 20 years. That postage stamp-sized lot ("the dirt") is what you really own!
40. Buy a house in a school zone that has a poor grade from the Florida Department of Education. Even if the Buyer has no children, an area with low-graded schools may have poor resale value.
41. Fail to consider commuting time, and alternative transportation (city bus, Uber, bicycle lanes). You may not care, but these things will affect resale value.
42. No understanding of the costs and responsibility involved in maintaining a house.
43. Compromising on important features (for example, buying a house with only one bathroom).
44. Fail to do a Final Walk Through Inspection shortly before Closing.
45. Believe that those Real Estate TV shows on HGTV are the way it happens in real life.
Buying a Home may be the most expensive purchase of your life. You must proceed with extreme caution, flanked by experts who have your best interests at heart. Don't make any of the 45 mistakes listed above!