Common Mistakes When Buying a Home

Today’s housing market has been labeled a Buyers Market. This does not mean, however, to throw caution to the wind and let your guard down when shopping for a new home. As you peruse the Listings in the paper or cruise around neigborhoods, keep the following in mind:


1. Resist Living Beyond your means. Very often we see ourselves in the home of our dreams and forget that the dream home we bought could quickly turn into a nightmare. Although a home is an investment, it should be a home that you can afford even if you suffer a short layoff or gap in income for a few months. It is far less stressful to buy a smaller home and gain some financial freedom when it comes to decorating, adding features and unexpected expenses.

2. Do not buy the first home you see. In this market, it is important to take your time and make sure that you have given yourself a chance to see a fair number of homes with different prices, locations and sizes.

3. Waiting for the Perfect Home. On the other end of the spectrum is the attitude that the perfect home is out there, and it will be found one day. Just like in the Samuel Beckett play, Waiting for Godot, where two men find themselves waiting for someone named Godot who never arrives, the problem of searching endlessly for the perfect home results often with most of the homes whose features they seek are being purchased. Or, if they wait long enough, market prices might even go up, leaving a homebuyer spending even more! Understand that it’s important to look for a home that has all of the necessary features your family needs, but don’t expect a perfect home that meets all of your desires in your price range will suddenly appear.

4. Shop around for a Mortgage Lender. It is tempting use the first lender who offers you a reasonable interest rate, but resist this. There are many lenders with many different programs. Ask them frankly not only what interest rate they can offer, but a good faith estimate (GFE). The GFE will show you not only the proposed interest rate, but the lenders fees, such as application, review fees, etc. Also, at the proposed rate, ask what will the payments be? Does that include property taxes and homeowners insurance?? Can you easily afford that? If not, you are taking a risk that may not be justified.

If you keep these points in mind, you would have a great start of finding a new home.

The Tough Housing Market

"NEW YORK (CNNMoney.com) -- The number of Americans losing their homes to foreclosure continued to soar in June, according to a report released Thursday.
RealtyTrac, an online marketer of foreclosed properties, reported that lenders repossessed 71,563 homes in June. A year ago, just 26,369 homes were taken back.
During the first six months of 2008, 343,159 Americans lost their homes, up 136% from 145,696 recorded during the same period in 2007.
The report revealed that foreclosure filings of all types, including notices of default, notices of auction sales and bank repossessions, rose 53% from June 2007, to 252,363. For the first six months, total filings rose 56% to 1.4 million."

If you are faced with major issues such as these, it is important to focus on the solutions. If you have already tried negotiating with the bank, tried contacting a realtor to see if the home could be sold. Be realistic with your price. Make sure that it is priced according to the comparable homes in your area.