5 Things Home Buyers Should Never Do

There’s tons of articles out there that give information on what a home buyer should be doing in
order to set themselves up for success. But what we rarely see are articles on what a home
buyer absolutely should avoid doing in order to be able to buy their dream home. Having helped
many people find their next home, I can say from experience that some of the tips outlined
below can be deal breakers - as in, I’ve actually had buyers lose the home because they
couldn’t follow a couple basic guidelines. Some of the other tips just plain make it easier for you
to get through the process.

Open New Lines of Credit

It is so tempting to go get that new refrigerator (or washer/dryer or furniture) for your new home
and open up one of those big box store credit cards to take advantage of the extra discount they
offer. However, this could be the downfall of your home purchase, and wouldn’t it be terrible to
have that fridge with no home to put it in? So please, do not open a new line of credit when you
are trying to purchase a home. This is especially important between the time you get an offer
accepted and closing on your new home. But really, this is important from the moment you get
pre-approved for your mortgage.

Let me explain...Your mortgage pre-approval is based on your income and your debts. A
mortgage lender does an in-depth look at what money you reliably make on a monthly and
yearly basis, and then they compare this to what you owe. Every lender and loan type has
different guidelines as to what is an acceptable debt to income ratio, and if you change your
ratios during the purchase process you may actually no longer qualify. Yikes!

At a minimum, consult with your real estate agent and mortgage lender before opening a new
line of credit to make sure it won’t mess anything up.

Buy a New Car

I don’t know what it is about a new home that makes people want to run out and get a new (or
new to them) vehicle. Maybe it’s the new neighborhood? Or new garage? Whatever the reason,
now is not the time.

The reasoning is about the same as above with one additional component. Yes, taking out a
new auto loan can mess with your debt to income ratio. But also, auto purchases usually require
a down payment and if this is pulled from your savings you could accidentally lower your
reserves to a point that you no longer qualify for a loan (or at least at the amount you were
needing). This is because mortgage lenders pay attention to how much savings you’ll have after
the home purchase transaction finishes. Those savings are called reserves. Each lender and
loan type have different guidelines regarding reserves, so make sure you understand what they
are in order to stay compliant.

Procrastinate On Turning in Paperwork

As a real estate agent, I understand this is such a stressful time! However, it doesn’t mean we
can let things like signing important documents and turning in paperwork move to the
backburner. In fact, buying a house means you need to up your paperwork game!
Once a seller has agreed to your offer you are in a binding contract. And part of that contract are
timeframes that you are obligated to follow. The consequences of not following the time frames
could be as dire as losing out on the home of your dreams. No one wants that for you!
So please, when your real estate agent or mortgage lender asks you to sign a disclosure or turn
in some financial documents, please make it a priority to do so. Of course you can ask
questions to make sure you understand what you are signing and why, but let’s be prompt to get
those answers.

Skip the Home Inspections

There seems to be three reasons that home buyers decide to skip home inspections.
1. They are in the construction industry and believe they can do it themselves.
2. They are tight on money and think it’ll be ok.
3. The market is so crazy hot and competitive they believe it’s the only way to win the
home.

Regardless of the reason you are considering skipping the home inspections, please don’t! A
home could be absolutely gorgeous and recently remodeled, but still have issues with its major
systems like plumbing, electrical, roof, and HVAC.
Most of the time, the home inspection will inform you of what should be on your to-do list to
keep the home comfortable and performing at its best. That often includes a few larger items
that you may want addressed before you own the home. Sometimes though, the inspections
give you major cause for concern about whether you actually want to purchase the home (like
finding out it needs a $50,000 foundation fix - eek!). And believe me, I’d rather you be able to
walk away from a money pit and lose a bit of money now instead of a ton later.
Something most people don’t consider is that the inspection reports are actually leverage. As in,
without the report from the inspector it becomes difficult (if not impossible) to negotiate with the
seller for repairs to be done.

Panic When the Home Isn’t Perfect

We all know there is no such thing as perfect. And yet, when it comes to buying a home I’ve
often seen my clients become panicked or angered when they find out something is “wrong”
with the home.

I’ll comment on brand new homes in a moment, but to begin let’s assume you are purchasing a
house that has been lived in by someone else (we call this a resale home). When you viewed
the home originally it was clean and shiny and looked like a perfectly good home to you. But
then you did the home inspection (thank you!) and found out that some parts of the home aren’t
up to today’s building codes and that there is a leaky faucet or the floor isn’t quite level, etc. etc.
Every. Single. House. Has something that needs to be fixed or is quirky or isn’t up to today’s
codes. That’s just the way it is. Building codes change all the time and homeowners aren’t
expected to change things everytime a code changes. Homeowners generally aren’t DIY
wizards either and often overlook something that a home inspector may deem “wrong” because
they don’t even know it’s incorrect.

Almost everything can be fixed. Some things are more expensive or unsafe than others, of
course, and that’s when you may want to negotiate for it to be repaired. For the things that may
be harder to fix, but aren’t necessarily unsafe (like the slightly unlevel floor) you just have to
decide if it’s something you can live with. I personally like to think of those things as the home’s
personality quirks. Just like your dog’s snoring, it sort of annoys you but you also love it!
A quick note on New Build Homes: You will have an opportunity to do a walk through with the
foreman. Make sure to really look at everything in depth. Most new home builders are very good
at addressing any fixes (cosmetic or otherwise) prior to closing the sale. Most new home
companies also offer extended warranties on workmanship and parts, so don’t be afraid to
reach out to them down the road when something stops working the way it should.

Ready to Own a Home?

I hope this article will help you on your journey to home ownership! If I've learned anything over
the years, it’s how to help my clients avoid accidentally missing their opportunity to own the
home that’s right for them. Have questions about the path to home ownership? Give me a call
today - I’d love to help