The 106 Common Mistakes Homebuyers Make (and How to Avoid Them)

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ISBN: 9780471751236 | 0471751235
Cover: Paperback
Copyright: 12/6/2005

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Everything first-timers need to know to avoid the most common mistakes homebuyers makeWritten especially for first-timers, this eye-opening guide turns you into an educated consumer, ensuring that the home or condo you buy is both a comfortable place to live and a great investment for the future. Compiled from the experience of hundreds of homebuyers, real estate agents, home builders, and mortgage lenders, it shows you the most common mistakes buyers make and illustrates them in practice so you don't fall into the same traps.Now revised and updated for today's hot real estate market, this invaluable resource covers everything from negotiating with sellers and making the down payment to shopping for the best mortgage and handling the closing. The new Fourth Edition also includes totally up-to-date guidance on using the Internet to find properties, secure financing, and collect important data. If you're thinking about buying a home in this overheated market, don't make these mistakes: Researching selling prices and still overpaying Believing everything your agent tells you Buying into an upscale neighborhood that's moving downscale Underestimating utilities and other costs Allowing your agent to negotiate for you Letting fear get the better of you and not buying at all Written by one of the nation's leading real estate experts and packed with hundreds of valuable tips and suggestions, The 106 Common Mistakes Homebuyers Make, Fourth Edition will give you the confidence-and the wisdom-to buy the right home at the right price.

Profit from the Mistakes of Others

(3)

Explore Possibilities, Set Priorities

(36)

Mistake #1 We want to own, but we pay less to rent.

(4)

Mistake #2 We want to own, but we don't have enough for a down payment.

(4)

Mistake #3 We can't afford to buy; the monthly payments are too high.

(3)

Mistake #4 No bank will give us a mortgage.

(2)

Mistake #5 Our agent told us to get prequalified (or preapproved) by a lender so we would know exactly how much home we could afford.

(2)

Mistake #6 Our agent said not to waste time looking at homes outside our price range.

(1)

Mistake #7 Sure, we would like to buy our own home someday.

(1)

Mistake #8 I wanted to wait until I got married.

(2)

Mistake #9 We were told not to buy unless we planned to stay put for at least four or five years.

(2)

Mistake #10 We know exactly what we want.

(3)

Mistake #11 We have to have a pool.

(2)

Mistake #12 We liked the house on Elmwood best, but our furniture wouldn't work there.

(1)

Mistake #13 There were so many rules, it was like living under socialism.

(2)

Mistake #14 What! Beans for dinner again?

(1)

Mistake #15 We bought because we were so tired of looking.

(2)

Mistake #16 We feared that discrimination would limit our possibilities for home ownership.

(3)

Home Ownership: How to Make It Your Best Investment

(29)

Mistake #17 We're not planning to buy. Experts say home prices won't appreciate in the future as they have in the past.

(2)

Mistake #18 The experts were wrong in the past, but things are different today.

(2)

Mistake #19 Lower rates of inflation mean lower rates of appreciation for homes.

(2)

Mistake #20 We thought we could make higher returns investing in stocks.

(5)

Mistake #21 We weren't concerned about our home as an investment; we just wanted a comfortable place to live.

(3)

Mistake #22 We were told to buy in the best neighborhood we could afford. The best neighborhoods always appreciate the fastest.

(2)

Mistake #23 We were told never to buy the biggest or most expensive house in the neighborhood.

(2)

Mistake #24 I'd never buy a condominium. They make poor investments.

(3)

Mistake #25 AT&T never lays anyone off, do they?

(2)

Mistake #26 With all the new construction, we thought the economy was really booming. Home prices had to go up.

(3)

Mistake #27 The newspapers say home prices are decreasing/increasing.

(2)

How to Find a Good Buy

(26)

Mistake #28 We thought we got a real bargain. Our house was listed $20,000 below other houses we looked at in the neighborhood.

(2)

Mistake #29 We thought we got a real bargain. We paid $20,000 less than the appraised value.

(6)

Mistake #30 The appraiser didn't tell us home values were going to fall.

(2)

Mistake #31 We didn't think to calculate replacement costs.

(2)

Mistake #32 We didn't pay attention to lot value. We wasted $32,000 on remodeling.

(2)

Mistake #33 Those ``comps'' weren't really comps.

(2)

Mistake #34 We figured the swimming pool added more to the home's value than it really did.

(3)

Mistake #35 We looked at selling prices but still overpaid.

(2)

Mistake #36 The sellers named the price, we named the terms.

(1)

Mistake #37 Everything looked like a bargain.

(1)

Mistake #38 I didn't buy anything. All the houses were grossly overpriced.

(3)

Locate a Great Neighborhood

(29)

Mistake #39 My agent said this was a good school district.

(2)

Mistake #40 We never saw the railroad tracks.

(2)

Mistake #41 We bought into an upscale development that's moving downscale.

(2)

Mistake #42 When we bought our house, the land across the street was a cornfield. Now it's a parking lot and shopping center.

101

(2)

Mistake #43 It didn't occur to me that on weekends the place could turn into a zoo of wild kids and party animals.

103

(2)

Mistake #44 Those people were a bunch of snobs.

105

(2)

Mistake #45 You're saying we can't build a fence around our yard? Isn't that unconstitutional?

107

(3)

Mistake #46 No need to worry; those laws are never enforced.

110

(2)

Mistake #47 We live in Naperville, but our kids can't go to Naperville schools.

112

(1)

Mistake #48 We didn't know there were stables nearby. The wind was blowing from a different direction the day we looked.

113

(1)

Mistake #49 No one told us we had bought in a flood plain.

114

(1)

Mistake #50 After a downpour, we can't drive down these roads.

115

(1)

Mistake #51 We seldom see the sun here.

116

(1)

Mistake #52 We bought out in the county to avoid the city's high property tax rates.

117

(1)

Mistake #53 The city cut our services and raised our taxes.

118

(1)

Mistake #54 Everyone around here seems apathetic. They've accepted decline.

119

(2)

Mistake #55 The sellers said it was only 25 minutes to downtown.

121

(1)

Mistake #56 We didn't walk the neighborhood.

122

(2)

Is This Home for You?

124

(28)

Mistake #57 Our agent said it was a lot of house for the money.

124

(2)

Mistake #58 Our agent was part order-taker, part chauffeur, and part narrator---but she didn't give us the help we needed.

126

(2)

Mistake #59 Our agent never mentioned ...

128

(5)

Mistake #60 We didn't hire a professional inspector. My dad knows all about houses.

133

(2)

Mistake #61 We didn't think a new home needed to be professionally inspected.

135

(1)

Mistake #62 I thought lead paint had been outlawed years ago.

136

(3)

Mistake #63 We now know why the sellers put up paneling in the downstairs den.

139

(1)

Mistake #64 After we moved in, the sellers' remodeling contractor put a lien against our home. And we had to pay it!

140

(1)

Mistake #65 We should have looked at the utility bills.

141

(2)

Mistake #66 Those little repairs and renovations sure can add up.

143

(2)

Mistake #67 Before we could add central heat and air, we had to spend $1,800 for new wiring and ductwork.

145

(2)

Mistake #68 The house looked great. I just didn't like cold showers, listening to my son's favorite radio station, or lugging groceries up the stairs.

147

(1)

Mistake #69 We had such great views.

148

(1)

Mistake #70 I didn't notice that the house was situated on two lots.

149

(1)

Mistake #71 We focused on problems, not possibilities.

150

(2)

Negotiate Win-Win

152

(26)

Mistake #72 We thought our agent represented us.

153

(3)

Mistake #73 I tried to buy directly from an owner to save the commission, but instead lost $10,000.

156

(4)

Mistake #74 We didn't know we could withdraw our offer.

160

(1)

Mistake #75 We never met the sellers. We didn't know anything about them.

161

(3)

Mistake #76 The worst they can do is say no.

164

(1)

Mistake #77 We thought the sellers had accepted our offer.

165

(1)

Mistake #78 The listing handout said ``wet bar/sink'' included.

166

(3)

Mistake #79 We fell in love with the house and had to have it.

169

(1)

Mistake #80 Our negotiations centered on price.

170

(2)

Mistake #81 ``Split the difference'' sounds like a good compromise to me.

172

(2)

Mistake #82 We let our agent negotiate for us.

174

(2)

Mistake #83 We pushed to get the absolute best deal we could.

176

(2)

The Best Loan at the Lowest Cost

178

(43)

Mistake #84 We never heard of special financing for people like us.

179

(4)

Mistake #85 We thought the FHA loaned only to low-income people and involved too much red tape.

183

(6)

Mistake #86 We wanted a fixed-rate mortgage. ARMs were too risky.

189

(4)

Mistake #87 We didn't negotiate for seller financing.

193

(2)

Mistake #88 Those were the fastest two years of our lives.

195

(2)

Mistake #89 I paid $2,500 down to lease-option a townhouse, then found out that no bank would give me a mortgage.

197

(2)

Mistake #90 We paid too much for our mortgage.

199

(11)

Mistake #91 Our lender canceled our loan approval because I went into labor early and had to take temporary leave from work.

210

(3)

Mistake #92 My loan fell through because of poor credit. But it wasn't my credit that was bad.

213

(2)

Mistake #93 Our lender turned down our loan application.

215

(6)

Become a Satisfied Homeowner

221

(28)

Mistake #94 Our friends told us we were getting a great deal.

222

(2)

Mistake #95 The lawyer created more problems than he solved.

224

(3)

Mistake #96 We shouldn't have taken escrow allowances for repairs.

227

(2)

Mistake #97 We accepted an escrow allowance of $6,000 for termite damage. Our repairs cost $18,347.

229

(2)

Mistake #98 We thought the roof warranty was good for 20 years.

231

(3)

Mistake #99 Our homeowners' insurance didn't cover our losses.

234

(4)

Mistake #100 After we bought, property taxes jumped $2,200 and we got hit with a $1,600 special assessment for new sidewalks.

238

(3)

Mistake #101 We didn't know title insurers offered discount policies.

241

(2)

Mistake #102 Our closing was like showdown at the OK Corral.

243

(1)

Mistake #103 We couldn't believe the way the sellers left the house for us.

244

(2)

Mistake #104 The sellers wouldn't move out of the house.

246

(3)

The Biggest Mistakes of All

249

(8)

Mistake #105 We didn't buy. We were afraid of making a mistake.

249

(3)

Mistake #106 We thought it over. We're going to continue renting.

252

(5)

How to Afford the Home You Want

257

(23)

Draft Your Offer

280

(21)

Internet Appendix

301

(3)

Index

304

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The 106 Common Mistakes Homebuyers Make (and How to Avoid Them)

Summary

Author Biography

Table of Contents

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