Buying a home falls somewhere between euphoric and terrifying. There’s the excitement of planning for your future, but the home buying process can be expensive, complicated, and the stakes are high. So, turn the music down low and take it slow if you want to avoid these three common mistakes that can fuel buyer’s remorse.
1. Overextending your finances
Don’t wait until the money’s been withdrawn from your account to realize that you’ve over committed. As a rule, your budget should reflect a practical assessment of your finances not your wish list. Do a preliminary analysis of your cash flow then work with a qualified lender to become preapproved for a mortgage, setting realistic expectations for what you can afford. Your budget should factor in the hidden costs of buying a home (such as closing costs, property taxes, homeowner’s insurance and association fees, etc.) as well as a sizeable down payment. While a small down payment may seem more manageable in the short-term, in the long run borrowing more money will increase your monthly payments and drastically reduce your initial equity. You wouldn’t stuff yourself into jeans that cut off your blood flow and you shouldn’t buy a home that does the same to your finances. If you can juuust afford it, it’s likely too expensive.
2. Not doing your homework
Before you commit to anything you need to become an expert on the home you’re interested in and its surrounding neighborhood. Staging can be seductive and nothing brings you back to reality like a home inspection. An inspector can root out any subtle defects with the home and help you know what you’re getting into, possibly preventing you from buying an impending renovation project. Once you’ve had the home inspected, you’ll want to check out the neighborhood. If the reason the home is so affordable is because the location is less than desirable, you may want to reconsider. Learn about local schools, transportation, weather, and the dominant demographics for the area. Working with a knowledgeable real estate agent will help you to get a complete picture before you sign on the dotted line.
3. Losing your cool
Staying emotionally grounded will help you to make calculated decisions. Be sure to get everything in writing and never take what is included in the sale for granted. Don’t overpay out of a sense of urgency. Many people find it helpful to use the services of an experienced real estate agent, especially during the negotiation process, to help keep emotions from running too high. An agent will work to find a home that suits you and your budget, while guiding you through the legal documents, negotiations, and subtle nuances of the transaction. If you do choose to use an agent, find one who is willing to work at your pace and whose personality meshes with yours.
Buying a home can be stressful, but with diligence, persistence, and all the necessary information on-hand, you can lock in the right home at the best price.