Page 22 - Your Home-Buying Packet:

12 Home Buyer Mistakes and How to Avoid Them

1. Not knowing how much house you can afford
The last thing you want to do is start searching without knowing how much house you can afford or touring
homes that are below your price.

2. Not getting a mortgage pre-approved
Speak to lenders before looking at houses. Ask questions and find out which mortgage is best for you. Sellers
will know you mean business when you have the finances already in place.

3. Emptying your savings
Along with the down payment, there are also closing costs which are usually an average of 3-5% of the loan.
Do not forget to budget for that. You also want to make sure you have money set aside for a rainy day.
When something breaks down, you have to call in an expert to fix it. The days of contacting the rental’s
custodial services are over.

4. Not looking for first-time home buyer programs
There are quite a few first-time homebuyer programs you may qualify for. Make sure you do your
homework and/ or speak with your real estate professional who can advise you. Search the HUD website for
programs offered by your state.

5. Using the seller’s agent
As a Buyer, you want an agent who will have your best interest at heart. The seller’s agent (listing agent) is
looking out for the their client – the seller…not you.

6. Getting just one rate quote
When applying for a mortgage, you should shop around to get the best rates and a mortgage that fits your
needs. Compare quotes.

7. Not checking credit reports and correcting errors
Check your credit report for errors. Reporting agencies can sometimes make mistakes which could hurt your
credit. If you find an error, report it asap.

8. Not knowing whether to pay discount points
Mortgage points (discount points) are fees which are paid directly to the lender at closing to get a
lower interest rate. One point is usually 1% of the loan. The more you pay in points, the lower your
rate will be.

9. Applying for credit before the sale is final
The worst thing to do is make large purchases or use credit or do anything which will have an effect on your
credit reports. Just because you’re pre-approved does not mean you are out of the woods yet. Lenders are
watching you up until you sign off at closing. So please do not open/close any credit accounts or make large
purchases until you have the keys in hand.

10. Getting caught up in the frenzy of trying to get offer accepted
It doesn’t matter if there are 0 or 100 other offers for the house you want. Do not take shortcuts such as not
using an inspector or overpaying.

11. Making a lowball offer
Sellers want to sell their home at the highest price. Buyers wants to purchase at the lowest price possible.
Then there is the market which is what actually sets the price. Submit strong, fair offers. Lowballing can insult
the seller and even cost you the bid.
12. Miscalculating repair and renovation costs
Don’t just settle for one quote when it comes repairs/renovations. Get referrals from your agent.