5 Pitfalls to Avoid When Buying a Home

Buying a house is an exciting and often complex process. As you go through the eventful journey of buying your home, are you aware of the common pitfalls many Homebuyers fall into?

To prepare for the best home-buying process, keep reading for our list of 5 pitfalls to avoid.

1. Not getting pre-approved for a mortgage

One of the biggest mistakes to avoid when buying a home is beginning the shopping process before getting a Mortgage Pre-Approval. This is a major error, especially in a real estate market as competitive as the Bay Area’s right now.

Multiple problems come with not getting pre-approved for a mortgage, including:

You may over or underestimate your budget. Don’t assume that you know how much you will get approved for. Even if you know what you can afford, you won’t be sure until you talk to a loan officer. The best idea is to pursue pre-approval with multiple lenders and compare the terms and rates they offer and the budgets they give you.
You might run out of time to make an offer. The current market in the Bay Area is so highly competitive that sellers tend to receive multiple offers within just days of listing. This seller’s market means any buyer waiting to pursue pre-approval after deciding they are interested in a house is already late. The chances of having time to secure pre-approval before the property enters escrow with someone else are slim.

2. Choosing the house over the location

Another pitfall you should avoid when buying a home is considering only the house itself and not the location. Remember, the one thing you cannot change about your home is its location.

Decide which locations would work for your lifestyle and family, and ensure you only look for homes in those areas. If you aren’t sure which neighborhoods to consider, talk to your Agent and read about the communities you have in mind.

Here are some things to keep in mind as you consider the location of your home:

Commute to work
Schools in the area
Community amenities
Crime rates
Proximity to airports, healthcare facilities, and retail or grocery stores
Type of neighborhood, i.e., urban, suburban, HOA managed, etc.

3. Buying a home that doesn’t fit your lifestyle

Before you look for a home, talk with your partner and list the features you are looking for in a home. Then, make sure to share these thoughts with your agent.

A common mistake you should avoid when buying a home is falling in love with a house that won’t suit your lifestyle. It is easy to be charmed by a good price, an aesthetic you like, or special features. However, to ensure this is a good investment, you must provide this home will work for you.

Some things to consider when finding a home that fits your lifestyle are:

Do you need guest space?
Is office space for remote work important for you?
Do you like to entertain? Is there space for it?
How much maintenance do you have time for? You may find that an older home or one with a large yard doesn’t fit your lifestyle.
Is the home pet-friendly? Is it kid-friendly?

4. Waiving a home inspection

A major pitfall you should avoid when buying a home is waiving the home inspection. In some cases, buyers will use this as a bargaining chip to make their offer more attractive.

We advise against this because it puts you at risk for any number of costly or dangerous problems in the future. A home inspection will give you peace of mind about the investment you are making. Additionally, you will likely be less able to secure a mortgage if you don’t have a home inspection unless you plan on a particularly large down payment.

5. Opening new credit accounts during escrow

After entering escrow on a home, a common mistake people make is opening new credit accounts. This might be for new furniture or appliances for the home or anything else like a credit card or car loan.

Even if you are confident you can afford the payments, this is something to avoid when buying a home. Any changes to your debt-to-income ratio or credit score may jeopardize your mortgage approval. At the very least, it is likely to delay the process. The worst-case scenario is that this purchase, which could have waited until after closing the escrow, sabotages the whole deal.