The Real Estate
Consumer Review

How To Avoid The Worst Real Estate And Luxury Home Buying Mistakes

Buying a new home is an exciting adventure for most consumers, but caution is needed in order to protect yourself financially when you are dealing with such large amounts of money.There are common mistakes that many home buyers make that can spoil their real estate purchase. However, you can learn from those mistakes and not repeat them. So here are some of the worst real estate buying mistakes that you want to avoid.

1. One of the most common mistakes that consumers make when they buy real estate is that they make a large purchase just prior to trying to buy a new home. Usually this purchase is a car, which of course is one of the most expensive consumer items for most people. This may not sound like a big problem, and it isn't if you plan to pay cash for your home up front. But if you plan on financing it instead, your debt ratio will have a huge impact on how much home you will be approved to buy. So avoid raising your debt ratio by making large purchases before buying real estate, and just wait till afterward for those purchases instead. Also try to avoid changing jobs around the time of buying a new home as this can also adversely affect the mortage terms that you can get too.



2. When it comes to actually buying a house that you are interested in, make sure that you have it thoroughly inspected prior to sale. This means not only a full house inspection as is most common these days but also check for radon gas levels, septic systems, private wells, mold issues and so on. Be very thorough in this part of the process and you can save yourself a lot of trouble later on.



3. Luxury home buying is a completely different field of real estate and should only be handled by qualified real estate agents who understand that market and are familiar with the needs of most luxury home buyers. This is not the place to try to save a few dollars by buying a luxury home on your own unless you have specific expertise in this field. Otherwise leave it up to the luxury home experts if you want it done right.



4. If you buy a new home from an individual party as a for sale by owner deal, be especially watchful during the entire process as you will most likely not have the benefit of the services of a qualified real estate agent to look out for your interests during the entire transaction. Be especially careful not to hand over any down payment directly to the home owner in order to secure the deal. All payments should be placed in a trust fund where access cannot be had by either party until after the contract is signed, or the deal collapses instead. This is unfortunately necessary due to some unscrupulous homeowners actually spending the down payment before the house closes, and if the deal falls through beforehand, you will have a hard time getting your money back in such situations.



5. Before you buy a new home, get very familiar with any restrictions that may be placed on that property by local zoning laws and any home owners associations. Far too many people buy a home with a plan to make certain changes or additions that they later find out cannot be done due to the home restrictions in that area. So know what those restrictions are before you buy and make sure that you can live with them afer the sale.



6. Never make any important agreements with the seller purely on a handshake. There is a reason why contracts are necessary in all real estate transactions, so any agreement that is important should be put in writing and be signed by both parties to establish that no misunderstandings have taken place. And be as thorough as possible when listing the requirements of the agreement so that it is clearly understood.




7. Never sign the papers and close on a house without doing a final walkthrough. This is critical because you may find some problems that weren't visible when all of the seller's furniture was in the house. Also some damage could happen while the furniture is being removed, so be sure to inspect the entire empty house before you sign the final papers.

These suggestions may seem simple, but it's amazing how many people get caught up in the real estate buying process and make simple mistakes that can prove very costly and discouraging later on. So use these tips provided as reminders to avoid the most common home buying mistakes.