Today’s top homebuying blunders

November 3, 2009 | 77 Comments

With cheaper home prices, lower mortgage rates and big discounts on foreclosures, buyers have lots of incentives to get into the real estate market. Anyone considering buying a home should still be cautious because the recent financial crisis has created a number of financial pitfalls. To help buyers navigate into this uncertain market, here’s a list of leading homebuying mistakes.

  • Buying for the short term. This is not a good time to try to flip real estate. Many homes purchased this year will lose value in the short term. Although they are likely to recover that value when the market rebounds, it remains unclear just when home prices will bounce back. So if you’re going to buy real estate this year, you’re better off buying a home that you plan to live in for a long time, rather than a short-term investment property.
  • Not understanding your local market. Prospective homebuyers should be paying attention to what’s going on in their local market when they are considering purchasing a home. Home prices in your market could be moving in the direction opposite to the rest of the country. The real estate market is tremendously individualized.
  • Not scouring for deals. Prospective homebuyers can obtain a solid understanding of conditions in their market by talking with a real estate professional, reading their local newspaper’s real estate section or finding a good housing blog that covers the area. While home prices continue to fall, it remains a buyer’s market. People considering a home purchase should understand that they are in the driver’s seat and be on the lookout for deals.
  • Rushing into a foreclosed property. Foreclosures can be a great deal, but some come with lots of baggage. The previous owners could have left the home in poor condition, requiring thousands of dollars in repairs. A real pitfall would be to buy a foreclosure without knowing what you’re getting into.
  • Overly aggressive buying. Make sure you can afford the property you are considering buying. Many economists expect the current recession to be the nastiest in decades, with some projecting the unemployment rate to hit 9%. This means it will NOT be a good year to stretch your finances. Just because a lender says you qualify for this much doesn’t mean you should spend that much on a house. What happens if you lose your job?





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