Let’s recap from our first part of this article ‘Top 10 Mistakes New Home Buyers Make’ when searching for the house of their dreams:
- Ignoring the property inspection and getting stuck with a poor property
- Paying too much for a broker’s commission instead of negotiating a fee
- Poor budgeting skills (not knowing how much you can afford to spend)
- Buying a home in a bad location
- Assuming foreclosed homes are always great deals.
Our next five mistakes may surprise you…
5. Not Getting a Home Security System
There are a lot of expenses being made with a new home and a big mistake that everybody makes is excluding a home security system with the ‘it’ll never happen to me attitude’. You’re not going to be the only people that know you’re moving into the neighborhood. Criminals look for opportunities, especially around the holidays to watch homes and wait for when nobody is home. Protect your investment, it costs a lot less than it would to replace the damage, loss and stress otherwise.
4. Too Small of a Down Payment
If you put more money down now, the less you pay later, right? While the idea is straightforward, for the potential home-buyer the stakes of taking that advice are much higher. Homes are expensive. Failing to put down enough money at the beginning could cost you an arm and a leg in interest charges. Putting yourself in the best financial situation is extremely important when purchasing a home.
3. Not Knowing Your Credit Profile
Knowing what your credit report says before heading to the bank will save you a lot of heartache and hassle. Negative items on your report could cause hang-ups in the loan application process or even prevent you from getting one altogether. Personally I use Credit Karma to maintain my credit profile. It’s awesome, doesn’t require any credit card to sign up with and doesn’t hurt your credit at all.
2. Not Protecting Yourself Contractually
No matter how much you plan, sometimes things just don’t work out. Your financing could fall through or the seller could back out at the last minute. If you haven’t considered these possibilities then you could have a huge problem on your hands. It may seem expensive, but consulting a lawyer is your best option in preventing you from getting stuck in a truly bad situation.
1. Saving On Your Home Owners Insurance
If you’re buying a home you’re going to need home owners insurance. You can get discounts of at least 5 percent for a basic smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium by as much as 20% if you install a modern home automation system that is connected to an alarm monitoring service. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost and how much you’d save on premiums.
Buying a new home is like Halloween, scary and wonderful at the same time. Hopefully, with these few tips you’ll be better prepared to face whatever the real estate market throws at you. Happy holidays and happy house hunting!