[schema type="organization" orgtype="LocalBusiness" url="http://4salebydonna.com" name="Real Estate Agent Donna Baker" description="Real Estate Agent showing homes for sale and available real estate in Monrovia, Pasadena, Arcadia the San Gabriel Valley in Southern California." city="Monrovia" state="Ca" postalcode="91016" email="donna@4salebydonna.com " phone="(626) 408-7766 "]
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Avoid Home-Buying Mistakes That Could Cost an Arm & Leg

January 15, 2009 by · Leave a Comment 

Buying a home can be a harrowing experience, fraught with unforeseen dangers. But it doesn’t have to be! You can stay out of trouble and make the most of your home-purchase dollars by avoiding the mistakes other home buyers commonly make.
The Wrong Home
Homeownership is not a short-term investment. If you select a home that’s too large to maintain, too small for future needs, or too expensive for your income, you may have to live with your mistake for awhile – or spend a lot of money getting rid of it. The same is true if the home is too far from work, too close to traffic, or in need of extensive repairs that you can’t handle. Be sure to take a realistic look at your financial situation – income, debt, future expenses – before selecting a home. Also factor in your housing needs, time constraints and home-improvement skills.
Bidding Blind
Some buyers offer a contract above the true market value of the property or fail to bid on a great value because they don’t know the market. Research the market you want to purchase in by reading local newspaper articles and ads, touring a variety of homes, and talking with people in the area. Your best source of information about home values may come from a professional buyer’s agent who specializes in the area.
Title Troubles
A title search may reveal encumbrances on the property title, such as tax liens, easements, leases, or an undisclosed co-owner. Have the title search done as early as possible. You can protect your investment from another person’s claim of ownership by purchasing owner’s title insurance in addition to a lender’s policy, which you’ll be required to purchase if you take out a mortgage.
Last-Minute Defects
During the final walk-through, some serious defects may become apparent that hadn’t been noticed before. Do you back out of the deal? Settle on the home anyway? These are difficult decisions that can be avoided by inspecting the home carefully before you make an offer. You can also include a home inspection contingency in your contract, then hire a professional inspector to check the home inside and out. You’ll be supplied with a report of items that need attention, the cost to repair them, and possible repercussions if they are left as is.
Pre-paid Shockers
Some items, such as real estate taxes and homeowners association dues, are pro-rated at settlement, while others, such as hazard insurance and taxes, have to be paid a few months ahead. Make sure you have enough cash for settlement by asking for those charges a day or two in advance, and check them for accuracy. Remember, if the settlement date changes, so will the pre-paid costs.
Seller Slip-Ups
Repairs not made, items that haven’t conveyed, and other contractual hang-ups can delay settlement. Be sure to take the list of agreed upon conveyance items with you to walk-through and check to make sure they’re present. Be prepared to set a dollar amount for an escrow fund for items that have fallen through the cracks.
Closing Rush
Get settlement sheets the day before closing to avoid last minute problems, such as an interest rate or points that may be different from those you agreed upon. Missing the settlement date because of a last-minute snag could endanger the locked-in interest rate or the entire sale. Minimize the problems by asking for a long lock-in, say, 60 days.
Wrong Mortgage
Lots of different mortgage programs are available to choose from, but find the best one for your situation and goals can be pretty confusing. Do your homework and make sure your lender has the experience and expertise to offer you a good selection of loans.