Mistake 1: Falling In Love with a House
Falling in love can be an amazing thing. It makes you happy to be alive and allows you to see the inner beauty of another. Falling in love can also be a terrible thing. It makes a fool out of you and blinds you to someone's faults until the spell wears off and it's too late. Likewise, although it sounds ideal, falling in love with a house could be your worst financial mistake. It easily leads to a Mr. Blandings syndrome, where you stubbornly ignore the solid advice of friends and experts.
Sure, different people have different needs. Some people seek out homes that they feel an emotional connection to. But, you should still take extra caution once you find your dream house -- think about how you will feel once the honeymoon phase's over. You may choose to overlook a home's idiosyncrasies now, but you may suffer buyer's remorse when you must deal with a cramped kitchen or creaky floorboards everyday.
Ultimately, falling in love with a house will very likely blind you to its financial value. You might find yourself offering a bid that far exceeds the true worth of the house, which makes for a bad investment. And, if you expose your infatuation to the seller or the seller's agent, they'll realize you'll be willing to overpay.
Not only can it lead to overpaying, but it can also allow you to fall into the several of the other mistakes that we've discussed in this list, such as trusting a verbal agreement, not considering resale value and foregoing an inspection.
Overall, when buying a house, it's a good idea to keep a cool head and an open mind, and always be prepared for the worst. Murphy's Law, which could have been written specifically for homebuying, states that if something can go wrong, it will. Still thirsting for more homebuying information? You'll find it in the links below.
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More Great Links
- "Brodrick, Cynthia." Top 5 home-buying mistakes." Bankrate.com. (July 10, 2008). http://www.bankrate.com/brm/news/real-estate/mistakes1.asp
- "Working with Real Estate Agents." North Carolina Real Estate Commission. (July 10, 2008). http://www.ncrec.state.nc.us/publications-bulletins/WorkingWith.html
- Barlow, Melvin. "Winning the Home Buying Game." Trafford Publishing, 2003. (July 10, 2008). http://books.google.com/books?id=-HIVHxkNrrEC&pg=PA83
- CNNMoney. "Credit report errors may cost you a job." CNNMoney. June 17, 2004. (July 10, 2008). http://money.cnn.com/2004/06/17/pf/debt/credit_report/
- FTC. "How to Dispute Credit Report Errors." Federal Trade Commission. (July 10, 2008). http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm
- Geffner, Marcie. "Don't Forget Your Pre-Approval Letter." Realtor.com. (July 10, 2008). http://www.realtor.com/Basics/Buy/Looking/PreApp.asp
- Greary, Leslie. "10 biggest home-buying mistakes." CNNMoney. May 16, 2002. (July 10, 2008). http://money.cnn.com/2002/05/13/pf/yourhome/q_tenmistakes/index.htm
- HUD. "III. Your Settlement Costs." U.S. Department of Housing and Urban Development. (July 10, 2008) http://www.hud.gov/offices/hsg/sfh/res/sc3secta.cfm
- Lewis, Holden. "4 tips for buying a house in a buyer's market." Bankrate.com. (July 10, 2008). http://www.bankrate.com/brm/news/real-estate/Oct06_4_tips_buying_home_a1.asp
- Max, Sarah. "Stumped by the housing market?" CNNMoney. October 28, 2004. (July 10, 2008). http://money.cnn.com/2004/10/27/real_estate/buying_selling/marketforecast/index.htm
- Motley Fool. "Closing Costs and Hidden Costs." The Motley Fool. (July 10, 2008). http://www.fool.com/homecenter/deal/deal04.htm