You’ve been searching for what seems like an eternity and have found the perfect home. It’s fits your budget, is a short commute to and from work, has the features you most want, and, the seller is eager. You’re confident that your purchase offer will be accepted and you’re ready to go forward because you’ve been pre-qualified for a home loan.
When the seller finally accepts your offer, you begin to get ready for your big day and start putting your moving plan into action. It’s now time to begin packing up more stuff and scheduling utilities to be connected, but, it’s important to understand a lot can happen between now and then. Before you get to the closing table, there’s quite a bit to do.
Avoid these Five Home Buying Deal-Breakers
Buying a home is an exciting time, but, it’s also an anxious one. There is much to do before you even begin your house hunt: saving-up for a sizable down payment, earnest money deposit, moving expenses, inspections, and, closing costs. In addition, you’ve got to work out the logistics of your move, and, if you currently own a home, put it up for sale.
“Houses have many potential problems that you will not notice, and that a qualified home inspector will. Before you make that pledge unto death, you want to know if the foundation is intact, or if there is other structural damage. You want to know if, instead of wood beneath the drywall, your house is being held up by termites. Or wasps. Or snakes. You want to know if the house you’re buying used to be a meth lab. Get an inspection.” —Primer Magazine
With so much going on at once and things being so fluid, it’s easy to feel the pressure. It’s perfectly normal to experience a few bumps in the road, however, there are things which simply can’t be ignored or rectified. Here are five home buying deal-breakers to avoid:
- The lender is must get “creative” with your loan. Being pre-qualified for a mortgage doesn’t guarantee you’ll secure a home loan. The process of being pre-approved is the next step, and then, on to the approval process. This is where the lender will really examine your credit file, income, assets, and more. If the lender tries to sell you on a creative loan package, it’s best to step back and get in-the-know about what’s preventing you from getting a conventional, fixed rate mortgage.
- The home inspection is turning up existing and/or potential problems. Almost every home inspection will uncover an issue or two, even in recently built properties and new construction can have problems. However, there are some issues which are just too costly and inconvenient — like termites, which wreak $5 billion worth of property damage every year. Riding a home of pests can easily exceed $2,500 to $3,000, mold remediation ranges between $2,000 and $6,000, while water damage from a burst pipe costs thousands to tens of thousands of dollars.
- The neighborhood is now past its prime. If the community is growing with new commercial and residential developments around it, that’s a good sign. However, if the neighborhood is stagnant, you’ll buy into a precarious situation. It’s important to remember that when you purchase a home, you’re buying into the neighborhood, not just a single property.
- The appraisal is significantly different than the listing price. In many markets around the country, median home prices are rising quickly. While that’s a good thing for those micro-economies, it can cause a gap between recently sold comparables and homes currently listed. If this phenomenon affects the appraisal, there are few options available, but, don’t make a move that will put you in a comprised predicament.
Another thing you should put concerted effort behind is to settle for “good enough.” While you might come-in well under budget, you’ll be signing yourself up for a lot of regret. For instance, if you need three bedrooms and settle for two, you’ll pay less but pay a whole lot more in the way of frustration because the home won’t get any larger.