The spring real estate season is shaping up to be a good one. Prices are up and new and existing home sales have shown great improvement from a year ago. If you are ready to jump into the market, take care to avoid these common mistakes. 1. Not running the numbers! Conduct a financial plan to determine whether you can really afford to buy. It’s important to understand how much home you can afford to buy and whether home ownership might preclude you from addressing other important financial issues in your life. Use this great rent vs. buy calculator from the New York Times -- renting might still be the better deal in your area.
2. Not clearing up credit report mistakes: If you have done so in a while, go to AnnualCreditReport.com and request your free copy. It's important that you correct any errors on the report before you start the mortgage process.
3. Waiting too long to get pre-approved for a mortgage: The mortgage process requires plenty of time (up to 90 days in some cases), patience and follow-through. Best to start early, make sure to compare apples to apples and to ask the broker the total costs to you at closing. This process is also is a good gut check on your price range.
4. Going it alone: As much as everyone complains about realtors, I still think that it's tough to go through the home buying process alone. In some markets, buyers’ brokers are available, but the most important qualities in brokers are: honesty, experience, good connections with other agents; and good referrals from buyers like you. Remember that most agents represent the seller, not the buyer.
5. Not hiring a real estate attorney: This is a major transaction in your life, so don't try to save money when it comes to legal fees. Even if your mortgage company provides a lawyer, hire your own to help draft all of the necessary documents and to ensure that your interests are being represented at every step of the process.
6. Blowing off the home inspection: Think you've found your dream house? Maybe, but unless you have an engineer walk through the premises with you, you might be buying a new roof in a couple of years. Don't get freaked out if a problem arises during the inspection--remember that it can often be solved with a simple adjustment in price. It's imperative to protect yourself so don't blow off this important step.