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Sue Gerlach

Broker Associate

3 Costly Mistakes Every Home Buyer Should Avoid

By Home Check America

Home-buying Mistake #1: Thinking you can't afford it. Today, buying the home of your dreams is easier than ever before. Many people who thought that buying the home they wanted was simply out of their reach are now enjoying a new lifestyle in their very own new home. Buying a home is the smartest financial decision you will ever make. In fact, most American and Canadian home owners would be financially broke at retirement if it wasn't for one saving grace - the equity in their home. Furthermore, mortgage rates are more flexible today than ever and tax allowances favor home ownership. Real estate values have always risen steadily. Of course there are peaks and valleys, but the long term the trend is a consistent increase. This means that every month when you make a mortgage payment the amount that you owe on the home goes down and the value typically increases. This owe less-worth more situation is called equity build-up and is the reason you can't afford not to buy. Even if you have little money for a down payment or credit problems, chances are that you can still buy that new home. It just comes down to knowing the right strategies, and working with the right people. See below.

Home-buying Mistake #2: Not hiring a buyer's agent to represent you. Buying property is a complex and stressful task. In fact, it is often the biggest single investment you will make in your lifetime. At the same time, real estate transactions have become increasingly complicated. New technology, laws, procedures and competition from other buyers require buyer agents to perform at an ever-increasing level of professionalism. For many home buyers, the process turns into a terrible, stressful ordeal. In addition, making the wrong decisions can end up costing you thousands of dollars. It does not have to be this way! Work with a buyer's agent who has a keen understanding of the real estate business and who is on your side. Buyer's agents have a fiduciary duty to you. That means they are loyal to only you and are obligated to look out for your best interests. Buyer's agents can help you find the best home, the best lender and the best inspector. Best of all, in most cases, the buyer's agent is paid out of the seller's commission, even though he/she works for you. Trying to buy a home without an agent at all is, well... unthinkable.

Home-buying Mistake #3: Getting a cheap inspection. Buying a home is probably the most expensive purchase you will ever make. This is no time to shop for a cheap inspection. The cost of a home inspection is very small relative to the home being inspected. The additional cost of hiring a certified inspector is almost insignificant, about .001% of the selling price. As a home buyer, you have recently been crunching the numbers, negotiating offers, adding up closing costs, shopping for mortgages and trying to get the best deals. Do not stop now. Do not let anyone talk you into skimping here. Make sure the inspector you hire is a member of the American Society of Home Inspectors (ASHI) or International Association of Certified Home Inspectors, (INACHI).  Their membership standards and requirements are the most stringent in the industry and many state laws are patterned after their Standards of Practice.  In addition, make sure the inspection company and/or the inspector is insured and licensed in your state, if your state has mandatory license requirements.  Experience does count when it comes to home inspections. An average home inspection takes about two to two-and-a-half hours for the inspector to assess all the components of the house and give you a verbal report following the inspection.  Stay away from inspectors that are in and out in 60 minutes or less in a home.  Chances are they didn't inspect everything, and are in a hurry to get to the next job.  Hire an inspector that inspects everything in the house and presents the information in such a way it can be understood by those who are not familiar with construction terms.  Hire someone who you feel comfortable with after making initial contact.  Pricing should be the last item to hire an inspector.  Your first considerations should be experience, report generation, trade association membership, knowledge, and customer service skills!