No matter which way you look at it, buying a home is a major
investment.  But for many homebuyers, it can be an even more
expensive process than it needs to be because many fall prey to
at least a few of the many common and costly mistakes which trap
them into either:
* paying too much for the home they want, or
* losing their dream home to another buyer or,
* (worse) buying the wrong home for their needs.
A systemized approach to the homebuying process can help you
steer clear of these common traps, allowing you to not only cut
costs, but also secure the home that’s best for you.
This important article discusses the 9 most common and costly of
these homebuyer traps, how to identify them, and what you can do
to avoid them.
1. Bidding Blind.
What price should you offer when you bid on a home?  Is the
seller’s asking price too high, or does it represent a great
deal?  If you fail to research the market in order to understand
what comparable homes are selling for, making your offer would be
like bidding blind.  Without this knowledge of market value, you
could easily bid too much, or fail to make a competitive offer at
all on an excellent value.
2. Buying the Wrong Home.
What are you looking for in a home?  A simple enough question,
but the answer can be quite complex.  More than one buyer has
been swept up in the emotion and excitement of the buying process
only to find themselves the owner of a home that is either too
big or too small.  Maybe they’re stuck with a longer than desired
commute to work, or a dozen more fix-ups than they really want to
deal with now that the excitement has died down.  Take the time
upfront to clearly define your wants and needs.  Put it in
writing and then use it as a yard stick with which to measure
every home you look at.
3. Unclear Title.
Make sure very early on in the negotiation that you will own your
new home free and clear by having a title search completed.  The
last thing you want to discover when you’re in the back stretch
of a transaction is that there are encumbrances on the property
such as tax liens, undisclosed owners, easements, leases or the
4. Inaccurate Survey.
As part of your offer to purchase, make sure you request an
updated property survey which clearly marks your boundaries.  If
the survey is not current, you may find that there are structural
changes that are not shown (e.g. additions to the house, a new
swimming pool, a neighbor’s new fence which is extending a
boundary line, etc.).  Be very clear on these issues.
5. Undisclosed Fix-ups.
Don’t expect every seller to own up to every physical detail that
will need to be attended to.  Both you and the seller are out to
maximize your investment.  Ensure that you conduct a thorough
inspection of the home early in the process.  Consider hiring an
independent inspector to objectively view the home inside and
out, and make the final contract contingent upon this inspector’s
report.  This inspector should be able to give you a report of
any item that needs to be fixed with associated, approximate
6. Not Getting Mortgage Preapproval.
Preapproval is fast, easy and free.  When you have a preapproved
mortgage, you can shop for your home with a greater sense of
freedom and security, knowing that the money will be there when
you find the home of your dreams.
7. Contract Misses.
If a seller fails to comply to the letter of the contract by
neglecting to attend to some repair issues, or changing the
spirit of the agreement in some way, this could delay the final
closing and settlement.  Agree ahead of time on a dollar amount
for an escrow fund to cover items that the seller fails to follow
through on. Prepare a list of agreed issues, walk through them,
and check them off one by one.
8. Hidden Costs.
Make sure you identify and uncover all costs - large and small -
far enough ahead of time.  When a transaction closes, you will
sometimes find fees for this or that sneaking through after the
"sub"-total - fees such as loan disbursement charges,
underwriting fees etc.  Understand these in advance by having
your lender project total charges for you in writing.
9. Rushing the Closing.
Take your time during this critical part of the process, and
insist on seeing all paperwork the day before you sign.  Make
sure this documentation perfectly reflects your understanding of
the transaction, and that nothing has been added or subtracted.
Is the interest rate right?  Is everything covered?  If you rush
this process on the day of closing, you may run into a last
minute snag that you can’t fix without compromising the terms of
the deal, the financing, or even the sale itself.
One More Tip...
Find out if your agent offers a Buyer Profile System or
"House-hunting Service," which takes the guesswork out of finding
just the right home that matches your needs.  This type of
program will crossmatch your criteria with ALL available homes on
the market and supply you with printed information on an on-going
basis. A program like this can help you to affordably move into
the home of your dreams.