1650 E. River Rd. #202
Tucson, AZ 85718 Phone: (520) 770-6679
Toll Free (800) 279-2211
Fax (520) 325-8784
Email charlie@tierraantigua.com

Buying Tips

Common House Buying Mistakes

Buying a house is the largest investment most people ever make. Yet all too often it's a decision made in haste without adequate preparation. Use our list of common house-buying mistakes to avoid costly regrets.
  1. Over-buying the first time. Being "house poor" is a very uncomfortable existence. A large and beautiful home with little or no furniture tends to be empty and cold. A life where almost every dime of your earnings goes to the support of your house wears thin very quickly and is a frequent cause of family stress. What if you have a lot of kids or you like to travel a lot? You've got to ask 'How is this housing purchase going to affect our monthly spending?' You have to look at all of your monthly expenditures. Experts say your total monthly debts, including your mortgage, should not exceed 36 percent of your income before taxes. Don't forget to allow for increases in ongoing expenses such as utilities and taxes.
  2. Finding out too late that you have no representation. This can be a real nasty surprise when you assume that the Agent with whom you are working represents you when they actually represent--and owe complete allegiance to--the seller. How does this happen? By not taking the time to investigate and familiarize yourself with the laws regarding Agency. Or, by rushing out to look at homes, whether in person or on the Internet, and contacting the Agent who has the house advertised (who will be the listing Agent and will absolutely represent the seller). Another pitfall occurs when you try to represent yourself in the purchase of a home, thinking that you will save money. This may be the case, but it is just as--or more--likely that you will run into a savvy seller who is looking to keep the commission savings in their pocket rather than give it to you. In addition, without representation and the use of a Comparative Market Analysis, how do you determine a realistic selling price for a property?
  3. Not getting pre-qualified and pre-approved. Being pre-qualified gives you a general idea of how much you can afford to borrow. Being pre-approved means a lender has verified your information and credit rating and agreed to provide you with a specific amount of money. You are in a better position to go house hunting knowing exactly how much you can afford and that you have financing in order. Being pre-approved also makes your offer stronger! It tells a seller that you're serious.
  4. Waiting for the "perfect" home. Many first time buyers make the mistake that they will, if they look around long enough, find a home that has a full 100% of their needs and wants. With the thousands of variables available in housing, including location, style, size, amenities and condition, this is almost always an unrealistic goal. There are three potential problems with this strategy: First, these buyers pass by homes that meet 90% or more of their requirements only to eventually give up (often purchasing homes with less of their requirements because they are worn out!). Second, while they are waiting for the "perfect" home, housing market prices (and often mortgage rates) continue to rise, adding expense to their purchase. And Third, the home they like gets snatched up by another Buyer. Instead, it makes sense to determine the most important of your needs and the most desired of your wants and selecting a home that meets the majority of them.
  5. Shortcutting the inspection process. This can involve skipping a whole house inspection completely in order to save the relatively small amount of money involved or it may involve using a friend or relative with limited experience to conduct the inspection. In either case you run the risk of not exposing potentially expensive--or even hazardous--defects in the property. Protect yourself and invest the $200 to $500 for a professional inspection. They usually include a check of a home's heating and air condition systems, plumbing and electrical works, roof, walls, foundation/structure, drainage, the garage and basement. What's frequently not covered? termites, radon, asbestos, mold and lead inspections.

    Bottom line: you should never buy a home without having it inspected. After all, you don't want to learn that you've bought a house that's filled with termites or has a frazzled electrical system. If you're building a new home, an inspection can ensure that all the work has been finished properly.

  6. Picking the wrong community. Some places are just flat-out expensive, and you'll probably have to search for a location that's affordable. That doesn't mean you should choose the cheapest locale.

    If you don't like the location you'll be unhappy. What's more, you'll probably have a hard time selling your property if the community isn't good. Ask around and read the local papers to know how the community is faring economically, what the major issues are, how many resources it offers.

    Don't neglect the schools. Gather such data as test scores, statistics on the percentage of kids who graduate and go to college, the student/teacher ratio and so on. Talk to parents and students to get the inside scoop.

  7. Not knowing what homes really cost. The best way to determine if you're getting a fair deal is by comparing the cost of the home you're interested in with similar homes in an area. You can do this easily by having Charlie provide you with a CMA (that's short for Comparable Market Analysis). A CMA lists such things as addresses of recently sold homes, prices, date sold, the number of bedrooms and bathrooms and -- ideally -- such things as the home's condition, its size and extra features.
  8. Using a bad real estate agent. Don't make buying a home more difficult by choosing the wrong agent. Avoid part-time agents who do only a few transactions a year and cannot possibly understand all the potential pitfalls of a real estate transaction. And be careful of the Seller's agent. You want a buyer's agent who works for you and understands your needs and financial limitations.
  9. Not going back to check on the neighborhood. If you're like most homebuyers, you probably spend many weekends looking for a new dwelling. But what happens to the neighborhood on weekdays or after dark? Is the house that's "convenient to town" sitting on a main thoroughfare that fills up with cars come commute time?

    The only way to answer these questions is to go back and see what the neighborhood's like at various times of the day and week. Do your neighbors spend weekends with the stereo blaring? You want to know as much about the neighborhood as possible before you buy.

  10. Forgetting to consider resale. It's easy when you're house hunting to forget what it's going to be like to sell your home down the road. But as you tour homes, put yourself in the perspective of the sellers. You may be drawn to a home that has quirky features or no closets or just one, tiny bathroom (You can use armoires. Share showers.) But others may not be as enthusiastic. When you buy, think about the day it comes time to sell.

    Avoid buying a home that costs 50 percent more than neighboring homes and think before buying the most expensive home on the block. Your neighbors' lower home values will weaken yours. Remember, markets change. If you buy intending to flip your investment and the market falls and you have to sell, your selling price may not be enough to even cover your mortgage.

  11. Forgetting about closing costs. Think it's bad to pay tax when you eat out? Wait until you're paying closing costs, which can run 2 to 5 percent of the home's purchase price, according to Tyson.

    Charlie can provide you with an estimated cost sheet that includes such expenses as: origination (points) on a loan, escrow fees, title and homeowners insurance, legal costs, property taxes, fees to record your need deed and notary fees.

  12. Relying on oral agreements. Get it right and get it in writing. Written agreements almost always trump oral ones when it comes to contracts. If the offer says the lawnmower is negotiable, but the agent says it's included, get it in writing.
  13. Making an unconditional offer. Protect yourself with these contingencies in your offer:

    - Mortgage financing -- You're pre-approved, but is the house? Before a bank will lend you money, it will want a formal appraisal of the property to confirm that there is sufficient equity in it to warrant the loan. If the house appraises lower than the sales price, the loan may be declined.

    - Inspection -- never buy an existing or new home without a thorough home inspection. Walk through the home with the inspector to learn more about the house and any concerns he or she may have.

    - Insurance -- confirm you can get adequate coverage. In some areas, it's difficult to get hazard insurance.

  14. Having buyer's remorse. No place is perfect. There will always be surprises. Don't let a few initial blips spoil the whole ride. And don't miss a great house waiting for the perfect one!


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