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Home-price
adjustments in markets around the country have
opened doors of opportunity for many renters. If
you are transitioning from renter to homeowner,
the prospect of making such a large investment
may be exciting, while at the same time
overwhelming. But it doesn’t have to be. Here
are six common mistakes to avoid.
1. Not understanding the homebuying process.
Educate yourself. Find a homebuyer seminar that
you can attend or research online. The U.S.
Department of Housing and Urban Development Web
site (www.hud.gov) has an entire section devoted
to homebuyers with common questions of
first-time homebuyers, mortgage and home-buying
programs information, downloadable tools such as
a wish list and home-shopping checklist, tips on
selecting a real estate professional, etc.
2. Not asking questions. There are many
facets and intricacies to the homebuying
process, so although you may gain a basic
knowledge, you will still have questions. Don’t
hesitate to let your real estate professional
know that you are new to the process. Make sure
you choose a sales professional who is willing
to spend time with you and walk you through the
entire process. He or she will expect you to
have questions at each step—from house hunting,
to making an offer to the closing. Remember,
this is one of the largest financial
transactions of your life, so you want to have a
clear understanding of what’s going on.
3. Buying on impulse. Don't feel
pressured into making an offer on the first home
you see. Buyers, especially first-timers, may be
impressed by the first two or three homes they
view. Look at a good selection. List the
positives and negatives about each home. Narrow
the prospects to three or four and then return
for a closer look. When you decide to make a bid
on a property, work with your real estate
professional to get all of your questions
answered before making an offer. But don't wait
too long to make an offer. The longer you wait,
the greater the chance other prospective buyers
may place offers, making it harder for you to
negotiate a good deal.
4. Looking outside your price range.
Before beginning your home search, consider
getting pre-qualified to so get an idea of how
much you may be able to borrow. Use this
information as a starting point in determining
your price range. Then take into consideration
other factors that will affect your monthly
budget once you are a homeowner, such as
property taxes, homeowners insurance, utilities,
private mortgage insurance (PMI) and
maintenance.
5. Not planning ahead. Think about
personal changes you are planning in the next
five to seven years. For instance, are you
starting a family, and if so, is the home large
enough and will it continue to be? If this will
be a starter home or if you think you’ll be
relocating in a few year, you’ll probably want
to pay closer attention to appreciation and
resale value. If a double-income is necessary to
qualify for financing and to make your payments,
do your plans foresee an income sufficient to
continue making payments?
6. Failure to focus on location. Don’t
just focus on the house. Examine the community.
Does it suit your lifestyle? Is the area safe,
well-maintained, close to work, stores and
schools? Find out about zoning and what new
construction is planned on vacant land in the
immediate area. Also consider the property
marketability when it’s time to sell.
Above all, remember knowledge is key. No
question is a silly question. Your real estate
professional can be an invaluable asset
throughout the process. Making smart home buying
decisions will make the home-buying process less
scary and your first home purchase a rewarding
experience.
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