Buying a house is probably the single most important financial decision you’ll ever make. Besides that, a new home represents a very real emotional commitment for you and your family, usually for a few years at the very least. It’s certainly not something you can afford to take lightly. Despite this, there are plenty of easily avoided common home buying mistakes that time and again even seasoned homebuyers fall victim to. As San Francisco’s top real estate agents, part of our job is making sure the home buying process goes smoothly. To that end, we’ve prepared a list of some of the most common home buying mistakes we’ve seen over the years, and what you can do to avoid them.
Skipping the Window Shopping
Relatively few people will be in the position to buy a new property right off the hop (and those that are will likely have been around the block, so to speak, more than a few times already!) In most cases, a prospective homebuyer will spend months just toying with the idea and getting some preliminary information. That’s great! It gives a homebuyer a good idea of what to expect from a variety of different locations and it helps to give a grounding in how fast different markets tend to move. Here in San Francisco, for instance, things move fast. But when prospective homebuyers skip this step, and jump right into the financing stages, oftentimes they aren’t ready to make a fully informed decision or they’re starting at a disadvantage. That’s why we suggest that anyone even distantly considering buying a new home start going to open houses casually to get a feel for the process and the industry.
Failing to Consider All the Costs
When you buy a sandwich, you buy the sandwich. As things get more expensive, so do the secondary costs. A new phone might need a new contract, or more data, a case, and so on. A new home, though, has a slew of secondary costs that many people don’t consider at the outset. In such cases, they often have to renegotiate their financing or rejigger their budget, and those delays can open the door to a more prepared buyer to snatch that sale out from under them.
Some costs are pretty obvious, like the legal fees and insurance, but others are more subtle. Will you need a specialist to inspect an older home for lead? What about a land surveyor, or an architect, to approve that new addition? Does the foundation need some repairs before that new garage can be built? Without a comprehensive plan, you can find yourself nickel-and-dimed to the tune of tens or hundreds of thousands of dollars in some cases, so be sure you’re prepared well in advance before considering financing.
Proceeding without 3rd Party Home Inspections
While we’re on the subject of advance preparations, let’s talk about home inspection. It’s never enough to trust the information you’re given at face value, if it comes from someone with their own interests. The seller may be unaware of certain issues, or may have thought that they were too minor to be worth disclosing, but you can’t trust such a major purchase to chance. Always bring in your own home inspector to confirm the data you’re given, or to look for any issues that might have been missed. Once the paperwork is signed, any new discoveries are your own problem to solve. That crack in the foundation, under the rug, could be a very costly thing to overlook, so be sure that any and all problems are taken into account in your financing and budget.
Not Buying the Location
Your home is an investment, right? Well, when it comes to investments, a house’s value comes just as much from its location as from its structure. That extra bedroom and converted bathroom on the main floor might be perfect for you, but a future buyer might be planning his or her own renovations. Their purchase decision might depend on the proximity to a transit line, or the potential market value increase of the property itself. In some cases, new developments can radically change a property’s value as well. Remember that you’re buying more than just the house — you’re buying the location, too. That should inform your buying decision just as much as the house itself.
Forgetting to Treat Home Buying as an Investment
Since we’ve brought up investing more than once in this piece, now seems a good time for a bit of a reminder: your home is an investment. In the San Francisco real estate market, especially, it’s absolutely paramount that you remember that property values are always growing. The sooner you invest in a home, the sooner you will start seeing that home’s value increase. Those dramatic increases in value may mean that you’ll be buying another home, reinvesting into the market, in just a few years. In other cases, it might be better to hold onto one property but to reinvest some of the equity against a second property, like a rental. In any case, just about the single most easily avoided of the common home buying mistakes is to buy a house without full due consideration of its value as a short- or long-term investment with plenty of growth potential.
Omitting Protection Clauses in the Contracts
So you’re ready to buy. You’ve dodged all the hazards and pitfalls, and it’s closing day. Did you include all the necessary protection clauses in your contracts? Once you’ve put your name in ink, that’s it. There’s no turning back. Be absolutely sure that your investment is covered against risk or damages as best you can. Don’t ever sign a contract without running it past a real estate legal expert, and be sure that you’ve taken full and complete advantage of every possible protection clause for your assets and your obligations.
What Do All These Have in Common?
All these common home buying mistakes share one crucial element: they can all be prevented by working with an experienced real estate agent! That’s where we come in. If you’re even considering buying a house in San Francisco, get in touch with Danielle Lazier + Associates today, and avoid every single one of these potential pitfalls with confidence and grace. Our team has the resources, the experience, and the dedication to get you the right home at the right price.