It takes time and commitment from both the buyer and the real estate agent you're working with to make the right investment. So how can you avoid unrealistic expectations about buying a home?
We've outlined 7 mistakes home buyers should avoid in order to make the right real estate purchase.
Limiting your house hunting search to just certain homes is a big mistake. Remember, new homes often lack extras like fencing and decks. And that could equal thousands more in upfront costs.
Landscaping alone can run around $3500 for an average-sized home. If a new home is under construction, the customizable upgrades could easily demolish your budget.
Don't fall victim to the HGTV unrealistic expectation of expecting your home to look just like the ones showcased on TV. It takes time, money, and a lot of effort to get a home to look Martha Stewart-ready!
How many of those HGTV homebuyers have confessed to going as much as $9,000 over budget purchasing a new home?
Bottomline: Keep an open mind.
We get it. There are so many fees involved with home buying that, at some point, a buyer says, "Enough!"
But a home inspection is one fee that's worth every penny. Committing financially to a piece of real estate for up to 30 years is a L-O-N-G time!
No one wants to grit their teeth when writing out the mortgage check each month because the house is a money pit.
Invest the money into a home inspection before making the long term commitment. Remember, the house you love could be riddled with costly issues. You simply don't know until you have a professional ensure you are making a sound investment.
Bottom line: Get peace of mind. Pay the fee for a home inspection.
#3 Underestimating Hidden Costs
There's more to buying a house than just the price tag. You also have to budget for an appraisal, closing costs, and property taxes among over expenditures.
And don't forget essentials like utility bills. You might like the extra square footage of the house, but are you ready to pay more in monthly utility bills?
Bottom line: When buying a home, look beyond the price tag. Consider the hidden costs to owning a house as well.
You love it. You want it. You can't really afford it. Maybe the seller will come down on the price...like A LOT.
Just because you want the home, don't assume that you can negotiate your way into it. That's not always true. It all depends on how motivated the seller is to sell.
What's more, most experts don't recommend bidding more than 10% below the asking price. If the home is located in a highly sought after area, low balling an offer won't get you in the door.
Bottom line: Be realistic about what you can afford. Don't expect negotiations to be a part of the process.
#5 Not Doing Enough Research on the Neighborhood
It might be a great house but:
- It's in a rundown neighborhood
- It's near a noisy airport
- It has a lackluster school system
- A sex offender lives nearby
- It has invasive power lines
It's critical to accurately assess the neighborhood. Not doing so is one of the most expensive mistakes a homebuyer can make.
Bottom line: Consider not only the physical condition of the home but the surrounding area as well. This will help you make an informed, responsible decision.
Did you know the US Forest Service says that a mature tree can increase home values by 20%? Discounting a property because it has trees that often appraise for anywhere between $1,000-$10,000 more is a mistake.
Trees add visual interest and create a cooling effect on the house. A home with a clear, open space doesn't offer either.
Bottom line: Don't discount the value of mature trees!
#7 Buying A Fixer Upper
The Gaines of HGTV have really glorified the fixer upper. What's important to remember is the expense involved in the transformation. (It's been reported that the renovations that occur on HGTV's Fixer Upper won't work with renovation budgets of less than $30,000.)
Before you decide to buy a house that needs renovation, make sure you can handle it financially and emotionally. It's a big commitment!
And if you make mistakes, you'll have to call a contractor. That means you'll pay 10%-15% of your project's total budget to a professional.
Bottom line: Know what you're getting into when you buy a fixer upper.
When you're ready to buy a home, let real estate pros guide you. They can help you avoid costly mistakes and point you in the right direction. You'll be a much happier homeowner because of it!
At Lilly Title & Settlement, we're a woman-owned company that offers title insurance and real estate settlement services. We encourage you to add title insurance as one of your necessities when purchasing real estate. It can save you a lifetime of headaches!
Learn more about us here.