10 Deadly Mistakes Buyers Make When Purchasing a Home

 

1.                  Making an offer on a home without being prequalified

2.                  Not having a home inspection

3.                  Limiting your search to open houses, ads or the internet

4.                  Choosing a Real Estate agent who is not committed to forming a strong business relationship with you

5.                  Thinking there is only one perfect house out there

6.                  Not considering long-term needs

7.                  Not examining insurance issues

8.                  Not buying a home protection plan

9.                  Not knowing total costs involved

10.              Not following through on due diligence

 

The majority of these items are pretty self-explanatory but I’d like to give some additional explanation to the last three items on the list. Item number 8, a home protection plan is normally referred to as a home warranty. A home warranty normally last for at least one year and covers such items as electrical and plumbing items, as well as appliances. The big advantage to the buyer is that if any of these covered items breaks down during the warranty term, the warranty company will send someone out to fix it and the buyer is only responsible for a deductible amount (normally less than $100).

 

Item number 9, refers to “total costs involved”. As a purchaser, you should always receive a “good faith estimate” from your lender which will detail all of the costs involved with the mortgage loan, as well as closing costs charged by the title company. For best results, you can contact the title company you will be using to conduct the settlement, have them get the fees from your lender and have the title company run a mock HUD 1. (HUD 1 is the settlement statement).  

 

The last item on the list talks about “due diligence”. Due diligence is anything that you should research in order to make a fully informed decision.     Although many of your concerns will naturally be addressed in the real estate purchase process (such as a home inspection) there are many other factors to consider, such as crime rate, schools, power lines, neighbors, environmental conditions, etc. A buyer should also make a trip to the local county courthouse to check out the local “general map plan”. This is a map which shows all of the scheduled development in the area surrounding the home you are considering purchasing. This is an important step, because what if the county is planning to build a highway or erect a Wal-Mart behind your home? What do you think that might do to your property values?