Monday, January 09, 2006

Top Home Buyer's Regrets After Purchase

It happens every year, home buyers regret their purchase after the house becomes theirs. Regrets are often a result of listening to poor advice from friends, family members and real estate pros, but sometimes buyers get so emotionally attached to a property that they overlook its faults and rush into a purchase. Take a bit of time to learn which mistakes are most common--it will help you make sure that your home buying experience is a good one.

1) Not Performing Inspections
Don't sign away your rights to inspect your new home prior to closing, even if you know the seller won't agree to make repairs. Inspection contingencies should always give you the option of backing out of a contract if you find that the house needs more repairs than you are willing to deal with. A whole house inspection is important, but so are checks for radon gas levels, pests, fireplaces, septic systems, private wells, molds and other potential problems.

2) Neglecting to Plan for the Future
Will you live in the house for the rest of your life? Probably not, so you'll want the property to appeal to potential buyers. Buying a home with good resale value sometimes takes a little patience and research, but you'll love the payback when it sells quickly and puts extra money in your bank account. A low price isn't a "deal" if it buys a house you'll be stuck with for a very long time.

3) Assuming the Listing Agent Would Get them "the Best Deal"
The listing agent was hired by the home seller to obtain the best possible price and terms for the property. That doesn't mean the listing agent can't work with you in a fair and ethical manner, but it does mean that you should have a full understanding of where the agent's loyalties are before you dial his phone number. You aren't obligated to call the listing agent. Most agents are members of groups called Multiple Listing Services that give everyone access to the same properties.

4) Forgetting to Read the Restrictive Covenants
You've moved in to your new house and are clearing a spot for a second garage. And it's the perfect time to take down those pine trees that drip sap all over the roof. Have you studied your deed restrictions or restrictive covenants to make sure you can make the changes? Restrictions dictate exactly what you can and cannot do on the land. You might be surprised how many people buy land and houses without bothering to determine if they can live with the restrictions.

5) Neglecting to Get All Agreements in Writing
Hand-shake agreements sometimes work out just fine, but it's risky to depend on verbal agreements for any portion of your home buying contract. Verbal agreements cannot be enforced and unless terms are in writing there's no guarantee that you and the person you are working with will have the same memory and interpretation of what was agreed to. Put every aspect of your contact in writing and make sure that everyone involved signs the agreement.

6) Not Taking a Final Walk-Through Before Closing
How would you like to walk into your new home and find out that the sellers damaged every piece of doorway molding when they removed bulky furniture? Or find a huge stain on the wood floor that had been hidden by a bed? You want to find damage before money changes hands, because it'll sure be more difficult to recover funds to make repairs after the papers are signed. Do a final walk-through after the house is vacant, on the day of closing if possible, and don't let anyone talk you out of it.

7) Taking on Too Much Debt
Many home buyers are using no-down or low-downpayment loans to purchase real estate. Even more are increasing debt by using loans to tap into their equity--the difference between what's owed on the home and what it's worth. If your equity is low, and the local real estate bubble bursts, you might owe more for the house than it's worth. That's not a problem if you plan to stay put until prices come back up, but an unexpected move could make it difficult to sell the house for a profit.

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