Buying a new home is a fun and exciting process.  You are choosing a place where you will spend the next several years (or maybe even decades) of your life.  A home is also a major purchase, and is the largest purchase most people will make.  This means you want to be smart when buying and avoid making costly mistakes.  Below is a lit of common mistakes that buyers make when shopping for a new home. 

1. Focusing on the color – Buyers tend to get caught up on superficial details such as room color.  Color is easy to change – you just need to do some painting.  Look past the color of rooms and imagine your favorite colors on the walls instead.  Painting is relatively cheap and easy to change.  Don’t overlook a house over something as trivial as paint.

2. Not doing the research – Don’t buy a home on an impulse.  Do your research before putting in an offer, and certainly during your option period.  Research things such as the school districts, number of foreclosures in the area, flood zones, future construction projects, crime statistics, taxes and insurance.  Talking to neighbors is a great way to get inside information on a neighborhood.

3. Making a list of likes and dislikes – An extensive list can cause a buyer to eliminate great properties and never see the potential of others.  It is fine to have a list of one or two things you absolutely must have and one or two that you cannot have.  Other than that be flexible.  It is difficult to find the perfect house that fits all of your wants exactly.  Keep an open mind and think about how you can make a house perfect for you instead.

4. Getting emotionally attached – Sometimes buyers will find a house and fall in love with it.  This makes you become attached, which can be a bad thing.  Being attached to a house means you are more likely to overlook problems that the rational part of your brain would object to.  Being emotional about a property can make you pay too much and can make you more likely to overlook or justify defects.  Try and stay objective, and be prepared to walk away from the house if the deal becomes bad.

5. Making an offer based off list price and not home value – In a perfect world every house would be listed for sale at fair market value prices.   Most are, however there are many out there that are listed at too high of a price.  The seller might think the house is worth more than it is, or may owe more money than the house is currently worth, thus pricing the house higher that it should be.  Unless the house is truly unique and there are no comparables to it, do a market analysis first and make sure the asking price is in line with what other similar homes are selling for.

6. Not budgeting for extra house needs – Buyers tend to think that their monthly house costs will consist of the mortgage payment, insurance and taxes.  There are always extra costs that you don’t think of, particularly when moving in to a new place for the first time.  These hidden costs might be minor, but they will add up, so you need to be sure to have extra space in your budget for extra expenses.  Some extra expenses include light bulbs, shelf paper, lawn equipment, curtains or blinds, paint, door locks, and furniture.

7. Thinking a personal home is an investment – A house is an investment, but most people have to live in their home for a long time before they see the value increase to over the purchase price and expenses, if ever (depending on current market conditions).  If your sole reason in buying a house is hope of profit one day, you are doing it wrong.  Buy a home wisely so that you will not lose a massive amount of money quickly, but also buy it for the comfort and convenience it will offer you.  Also, negotiate a good deal, but don’t torpedo your dream house over a few thousand dollars just to try to “win” the negotiation.  That amount won’t matter much over the long term anyway.

8. Not planning to stay for 5 years – If there is a good chance you will need to move in under five years, buying might not be the right option for you at this time.  You will incur a lot of fees when selling your house, and unless you bought it way under-value, you will likely lose quite a bit of money selling it within a few years of purchase.

9. Skipping the important inspections – Always get an inspection done on a home before you buy it.  An inspector can help identify problems with the house that are not quickly visible to the untrained eye.  Since a house is a large purchase, don’t skimp out on other inspections either such as a termite inspection or a pool inspection.

10. Buying based on your old market-area prices, not the new market-area prices– House prices vary wildly – from state to state, city to city, and even neighborhood to neighborhood.  If you are moving to a new area, spend some time researching house prices in the new area first.  You want to be sure your expectations are in line with what houses in your new area will cost.

This week’s Fun Friday Story is about a tenant that took the wrong approach to submitting a repair request. 

The tenant in this story had lived in the house for maybe three months when I got a call one day from them, demanding that we replace the stove. I asked what was wrong with it, and they said it was crooked and their pots wouldn’t stay on the burners. I had never heard of this problem before, so I started asking questions about what they meant when they said their pots were sliding off.

I guess they took my questions and skepticism the wrong way because the next thing I knew they were screaming at me about how the pots always slid off the stove and it almost splashed hot water on their foot and could have burned them and now they were going to sue if we did not replace the stove with a new one. Well, that escalated quickly.

There are a few things wrong with this demand approach they decided to take. The first is that they had apparently been living with this issue for three months but had not said anything about a problem before this dramatic phone call. If the problem was that serious, I should have been notified of it much sooner. Secondly, they demanded a brand new stove. If an appliance has to be replaced, I will replace it. However, if it is a simple repair then I will always try to do the repair first. Crooked burners sounded like an issue that fit in the repair category. The tenants aimed too high in their demand, making them sound unreasonable. And finally, they threatened a lawsuit. This is never a good tactic unless it is truly a last-resort option and all other communication has broken down. This was not the case here, as this phone call was literally the first time I had heard of any problem with the stove. Threats do one of two things – they make you seem unreasonable and overly dramatic, or if it appears legitimate, it will get your complaint forwarded to my lawyer and/or police to handle. Neither one gets the hoped for result.

I knew this tenant fell into the overly dramatic category, so I sent a repair person out to look at the stove. It turned out the burners were just put in crooked, and there was absolutely nothing wrong with the stove at all. This cost me a $20 repair visit, which is much better than replacing the appliance with a new one. What made this story more fun was that the tenant regularly paid their rent late. Fun fact – if you are late on rent a landlord is not obligated to make any repairs. It is usually bad idea to call your landlord and threaten with lawsuits when you cannot even follow the basic procedures for paying rent on time and providing notice of repair requests.