Are These The 7 Deadly Sins of Buying a Home?
According to a recent article, there are 7 sins of buying your (first, especially) home, along with my take on how accurate that is:
Article: Looking before being pre-approved for a loan.
My Take: Maybe. While it's true that you might look at homes outside of your budget or approval zone (more than the bank will lend you), it's sometimes helpful to get out and see a few places to get a sense of the market and whether or not you're really ready for a move. You can use an online calculator to get a general sense of your budget and go see a few homes around that figure. This can help you get a feel for whether this is something you want to do or if it's just an itch that will shortly pass.
Article: Only applying to a single lender
My Take: This is a fairly common opinion and one I'm not opposed to. That said, I moved in 2021 and talked to only one lender. I knew he was great to work with and was happy with the numbers he gave me. That said, you can talk to a couple lenders to see what options are available. It might also be helpful to let them know you're doing it. My preferred lender will even look over what a competitor sent you and will let you know if he can or cannot match it, which is a nice and honest approach.
Article: Not estimating enough time for the process
My Take: This is probably true for first time buyers most, especially in the phase of finding the right house. Right now, with inventory low, we might see everything for sale that looks good in a fairly short period of time. From there, we need to look for off-market options or wait for new houses to go up for sale. When there's plenty of inventory, buyers sometimes need more time to be comfortable that they've seen enough to really know what's good. Either way, it can take longer than budgeted for, especially on a tight budget or with very specific wants and needs.
Article: Not working with an experienced professional
My Take: It should come as no surprise that I agree with this one. Aside from the obvious advantages, one of the hidden benefits of have a skilled, attentive and experienced partner is having a non-emotional set of eyes seeing everything you're looking at. I don't talk people into buying specific homes, but I often talk them out of it.....and am often thanked later for it.
Article: Falling for real estate scams
My Take: Ug. Yes. Sometimes, these are "sweet off market deals" or "wholesale" options or the like, that really aren't good deals, but framed as such by people with enough experience and charisma to lead you down a bad path. Having a good agent should get the risk of this down to about zero. That said, it's also good to listen to your agent and lender and keep your ears open for red flags such as promises regarding the market, how a certain home will appreciate, or similar, if the promises are pretty grandiose.
Article: Buying a house with a friend
My Take: Yes, there are a lot of potential pitfalls here. While buying with a friend can get you into a place with a smaller investment and help you share the risk, there's a lot that go wrong - friends don't keep up with their share of maintenance, the bills, or they want out of the house before you do....or vice versa. Some of this can be mitigated with a written agreement up front, but always remember that you're responsible for your friend's share of everything....at least according to the lender, creditors, adn utility companies.
Article: Not buying a house if you can
My Take: Sigh......maybe. I get it - real estate is a strong long-term investment. Rarely, if ever, does it not pencil out over time. That said, the timing isn't always good, even if you can afford a home. As well, you might really enjoy living in a house where the landlord has people take care of everything, but have no interest in owning one. In this case, buying a condo would be your best bet, but that might not be the lifestyle you want. As well, some people are in flux periods of their lives and buying a home might not be wise if they may need to sell in 2-3 years. I agree with this one, but it needs an asterisk next to it to allow for exceptions.
My Addition: Not budgeting strongly enough. The lender will approve you for an amount, but it's important to run your own budget to ensure you really know what makes sense for you each month.
My Addition: Being too heavily influenced by the opinions of others or real estate tv. Do what's best for you, not what everyone else wants you to do.

