Yesterday we talked about some of the major home-buying mistakes: falling for a home you cannot afford, overlooking flaws in the home just because you think there’s nothing better out there, and buying a home you don’t really like. Today we’ll look at three more mistakes, that could really end up costing you.
Overlooking Major Flaws
Some people fall so in love with a home that they’re willing to overlook the fact that there are cracks in the foundation (“probably nothing major”) or that it doesn’t have a furnace (“so, we’ll just buy one as soon as we move in.) But these problems could be extremely costly to repair, so costly in fact that it will be very difficult to get to them just after you’ve finished buying a home, paying for closing costs, making a down payment, etc. And sometimes, it might be impossible to fix these major problems. Don’t settle for a home that has major problems just because it’s got those state-of-the-art appliances you want or it’s the perfect layout for you.
Thinking You’re the World’s Best Handyman
It’s easy to wander through a home and say, “Oh, I can knock out that wall,” or “Don’t worry about the plumbing, it’s a small job. I can handle it.” But if you’re not a contractor or professional handyman, you might want to reconsider. Not only may jobs be much bigger than they originally seemed, but if you get halfway through and then realize that you have to call in professional help, it can cost twice as much to fix the problem and any mistakes you made along the way. Take all costs into considerations when it comes to repairs that need to be made to a home, and calculate these in with the asking price to determine if you can really afford them.
Putting in an Offer that’s Far Too High
When the market is extremely hot, it’s easy to get involved in a bidding war (and stay there because you really, really want that home!) And it’s just as easy to put in an offer that’s far too much because you want to avoid said bidding war. But doing this could cause a few problems. Firstly, if the home isn’t appraised at that top dollar you paid for it, the lender could only approve you for a fraction of that amount – leaving you to come up with the rest all on your own. Secondly, when it comes time for you to sell your home instead of buy it, and market conditions are the same or worse than they were when you took the plunge, you could end up losing a significant amount of money on that home. Don’t overpay. It won’t do you any good now, or in the future.
There are two other big house-buying mistakes you can make – waiting too long to put in an offer and rushing to get one in. Come back tomorrow when we’ll talk about walking the fine line between the two, and how you can manage this difficult balancing act.