Buying A Home
Buying a house – Three Errors to Avoid
Buying a home is often a stressful process because it is usually the single largest purchase of your life. Even it is not your first house, it's easy to make a mistake, it costs hundreds or thousands of dollars. Here are three common mistakes to avoid.
1st Pay for very
This is not about anything to pay for a particular home. The error is hard to do if you want to borrow to buy. An assessment will be done and the lender will probably refuse to borrow enough for you to buy a too expensive house.
The common mistake here is the advice of real estate agents, lenders and even your friends and family who often want to encourage you to buy a more expensive home than you can afford. They can call it an "investment" and claims that real estate always goes up in value, so you should get as much as you can. Of course, history of recent shows that home values do not always go up, and this kind of thinking has a lot of families facing foreclosure now.
Buy what you feel comfortable with. If you can not easily make the payments even after a short layoff from work can you may be overextending yourself. And keep an eye on lenders "solutions" to this problem (see Section 2).
2nd Trusting Lenders
I am not suggesting that lenders are all out to get you or that you should look at them suspiciously, but they are not necessarily looking out for your best interest. It is your job. Their's is to sell loans. Buying a home usually requires buying a loan, and as we see now (2008), many loans are not appropriate if you want a secure future. Although there are sometimes good reasons for grace, and adjustable-rate zero-down loans, most of the time these should be avoided.
Never mind what a lender recommends or suggests. Ask him only for the facts and do your own math. If the interest rate on your loan ranges from 5% to 10%, what will the payments? Can you easily afford it? If not, you're taking a risk that may not be justified.
3rd Trusting Real Estate Agents
When you buy a home, real estate agent to help you, as lender, has his own agenda. It's not that he or she does not wish you the best, but they would still more for their own families, so the primary goal is to sell something. Furthermore, unless the agent is explicitly working for you, she has a fiduciary duty responsibility to work against you if that is what is best for the seller. In other words, you if she thinks will pay more because of one comment you make, she should disclose this information for the home owner.
Although a buyer's agent can be difficult. It is nice to think that they work for you, but they still get paid (typically) once a sale is made. It's a beautiful motivation to push you into a home quickly, whether it is the best for you.
Be aware of whether an agent really shows you the homes that match your needs, rather than those he or she would buy. Many estate agents do not listen well and will show you what they think you want, rather than to ask you more questions. They can lead you to buy a house that does not fit your needs or costs more than you want.
A final word about estate agents: They are not experts in all things. In fact, some hardly an expert on anything. I have met agents who did not understand a single vendor finance offer and others suggested that the cracks in the foundation was "no big deal," even if they knew anything about construction. Unless an agent has particular experience in a field, take what they say with a grain of salt, and seek other advice.
Buying a home that actually is right for you start to avoid three errors above.
About the Author
Copyright Steve Gillman. To see a photo of the house we bought for $17,500, get a free ebook on Buying A Home For Less, and a free real estate investing course, visit: http://www.HousesUnderFiftyThousand.com