Homeownership is still a significant dream for many people, but there are numerous issues buyers need to be aware of when shopping for a home. Rather than being a dream come true, buying a home can quickly become a nightmare if a purchase is rushed. Here are five mistakes to avoid when purchasing a home.

Missing Legal Issues

Purchasing a home requires signing a variety of legal documents. It’s a good idea to have an attorney review all documents prior to signing them. Those documents range from an agent representation agreement to closing documents. Even a minor error in a document can prove to be costly later, so hire a lawyer to go over every document.

Ignoring Budget Realities

Real estate industry experts all agree that anyone shopping for a home should visit a lender and be prequalified or preapproved for a mortgage before contacting a real estate agent to look at properties. Many agents will also insist that prospective buyers be preapproved before shopping for a home. It’s vitally important to know what you can afford to spend when browsing the area’s homes for sale. It’s also a good idea to avoid spending more than you’re pre qualified for with the idea you’ll be making more money in the future. In some cases, that will be true, but taking any risks is not a good idea when the economy is as unsettled as it is today. Evaluate your real home needs as well all financial commitments prior to making an offer to purchase a home.

Accepting the Wrong Type of Mortgage

Virtually every home can be financed by more than one type of mortgage.The long-term costs of mortgages will vary significantly, so don’t accept the first proposal from a lender without exploring all the available options. VA, FHA, and conventional mortgages have different closing costs and interest rates, so shop carefully when looking for a mortgage.

Overlooking Faults

A home may be in an ideal neighborhood and be the style you’re looking for, but if there are substantial issues present, making an offer isn’t a good idea. Even if the issues with a home appear to be relatively minor, the repair costs can be devastating. Underlying issues can easily cost far more to fix than a buyer can comfortably afford. Even when a home looks good, a home inspection often uncovers major issues. Rewiring a home or making expensive upgrades to the home’s heating and cooling system frequently add costs that push the home’s real price out of reach. If major issues are discovered during an inspection, and the seller won’t make the repairs, look for a different house.

Not Considering All Homeownership Expenses

When purchasing a home, the mortgage will generally be the single largest
expense, but there are other costs to consider. According to national statistics, normal annual maintenance expenses are roughly one to four percent of a home’s value. On a $200,000 home, that means buyers should expect to spend between $2,000 and $8,000 per year for normal maintenance. Replacing appliances, repairing storm damage, and even having a tree removed are all issues property owners routinely experience. Make sure enough money is held in reserve to deal with those types of expenses.

Ready to Shop for your first home?

If you’re ready to start looking for your first home, start by putting a team of experts together to provide the help you’ll need. An attorney, a lender, and a real estate agent should all be parts of that team.