Ten Biggest Homebuying Mistakes
In the last 25 years, David Weekly of Houston has bought six different homes and sold 30,000. He founded the company that bears his name in 1976. Professional Builder and Builder magazines have named his firm as “National Builder of the Year” and “America’s Best Builder,” respectively.
In his new book, How to buy a Home Without Getting Hammered, David shares some secrets, checklists, key questions and enlightening anecdotes. Chapter four covers the ten biggest mistakes in homebuying.
• Mistake number one: not doing your homework. A home is the biggest purchase most people ever make. If you’re buying something with a price tag that’s two or three times your annual salary, shouldn’t you consider all the angles?
“Think about all the factors that can affect a home’s value, “David says, “its location, school district, deed restrictions, taxes, and amenities … there’s really no excuse for entering the market ill-prepared.
• Mistake number two: trying to make a shrewd investment. If you’re not a financial genius, real estate investing is no place for amateurs. David advises that, “When it comes to buying a home, the best bet is to choose the one that appeals to you.”
If you like the house, chances are others will too. That doesn’t mean buying with your heart and not your head.
• Mistake number three: choosing a poor location. If the home of your dreams is perfect in every way except that a bowling alley back up to it, walk away.
“Nothing spoils life and resale value like a poor location, “David writes. “If it bothers you now, don’t think you will learn to live with it …”
• Mistake number four: overlooking an inferior floor plan for an attractive exterior. Curb appeal is important. It makes resale a lot easier.
“But if the romance doesn’t continue when you open the door, then you’ve got a problem that will be difficult to unload,” David says.
If he had to pick between a good-looking exterior or a knockout interior, David says he would choose the great interior every time. After all, that’s where you live.
• Mistake number five: not considering how your family wants to live. Not every buyer carries the same mental picture of the perfect home. Don’t pick a house because your parents or best friends would like it. The home needs to fit only one family – yours.
“If you are honest with yourself, “David says, “you can find a home that will fit your family and feel like home.”
• Mistake number six: if buying a resale, not having the home properly inspected. If you fall in love with a home, you may have lost your objectivity and see only what you want to see. That’s when professional help is needed.
Structural and mechanical inspectors are worth every penny. They should be licensed by the state and have no personal relationship with you, the seller or the real estate.
“This could be the toughest decision of your life, but ignore the engineer’s warning, and you will live to regret it, “David says.
• Mistake number seven: if buying new, failing to check out builder’s reputation. In his book, David gives questions you should ask a builder. These include: How long have they been in business? How many homes have they sold? What kind of warranties do they offer?
“The best way to check out a builder is to ring some doorbells and knock on some doors, “David advises. “Beyond all the fancy advertising and hype, builders have only one thing of real value: their reputation.”
• Mistake number eight: not getting what you want because you’re impatient. There are two things you should never rush into: marriage and homebuying.
“Show me someone in a hurry, “David writes, “and I’ll show you someone who pays too much.”
That’s because the single biggest investments you ever make requires energy, effort and research to do the job right. If you find yourself in an unavoidable time bind, try to arrange to delay the purchase.
“Whatever you do, even if you don’t have time, and you must move forward, try not to show it until after the price is set.”
• Mistake number nine: waiting for a better time to buy based on the market and interest rates. Who can predict the future? The best we can do is learn from the past. History shows that those who purchase homes and kept them for three to five years or more did better than those who didn’t.
• Mistake number ten: not buying at all. “No places to call your own. No control. No tax break. No appreciation. No equity. No kidding.”
Contributed by David S. Jones, reprinted with permission from the Real Estate Center at Texas A&M University.
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