Mistake #1 – Not getting your finances in order

Before you start looking for a house, take a good look at your current financial situation. Not knowing exactly what you can and cannot afford, you’re setting yourself up for the heartbreak that comes with finding and falling in love with a new home only to realize you can’t get financing.

Here are 3 keys to know:

What are your current monthly expenses? Make a list of all your monthly expenses, such as student loans, car payments, credit card debt, phone and Internet charges, and other monthly purchases.

what is your credit score? Get your credit scores and make sure they are accurate. Credit reports often contain errors that can lower your credit score and cost you money in interest rates and loan fees.

What can you pay? Consult a “mortgage calculator” to help you determine how much you can afford. You can calculate exactly how much you can afford simply by entering your income and expenses and calculating the maximum mortgage payment amount you can afford.

Mistake #2: Failing to Get Financing Before You Make an Offer

Once you know your financial situation, make an appointment with a mortgage lender to get pre-qualified for a mortgage. One of the biggest pitfalls home buyers make is having their real estate agent write an offer without a pre-approval letter. With this letter, sellers know that you are serious about buying a home and can close the deal.

Mistake #3: Making a Major Purchase Before Closing

Once you’ve gotten pre-approved and come to an agreement on your dream home, don’t buy anything on credit or a major purchase. Opening a new credit card or getting a car loan can cause your credit score to drop. Don’t think the lender isn’t looking. They are! And often check your credit weeks before closing. Small changes to your credit score can cause an insurer to deny your loan, and if your contingency has expired or been removed, you could lose your deposit as well as lose your home.

Mistake #4 – Buying the wrong house.

It can be easy to get carried away with the excitement of buying a new home, but before you let your emotions run wild, take a step back and look at the house with new eyes. Make a list of the priorities that are most important to you.

What can you live without?
What would be nice to have but not essential?
What don’t you want?
Do you like the neighborhood?
Does the house have resale value?
If you are considering a major repair, do you have the resources to complete the job?

By asking yourself these questions before buying a home, you’re much more likely to be satisfied with your purchase.

Mistake #5: Shortening Your Home Inspection

If you’re short on cash, one way you could save money is a home inspection. This could lead to disaster. A home inspection can reveal “behind the scenes” issues that you don’t want to deal with later. An inspection costs around $500 or less, but can be worth millions in peace of mind.

Mistake #6 – Making a low ball offer

Everyone wants a lot. But if you really want to buy a particular house, don’t make a ridiculously low offer. This will only annoy or offend the seller, virtually guaranteeing that you will not get the house. Gather the facts, work with a trusted purchasing agent, and come up with a comfortable number you want to present.

Mistake #7 – Not Including Contingencies in the Contract

Contingencies are your legal “out” if something goes wrong during the buying process. Contingencies include things like allowing you to renegotiate if the home’s appraisal falls below the agreed price or opting out if the home inspection shows major flaws or you don’t get the financing you requested.

Mistake #8 – Not working with a good buyer’s agent

It is crucial to have someone separate from the vendors to work on your side. Plus, you need someone who works in your area to know the market and what exactly you can negotiate when the list price is as low as possible, like including furniture or asking for closing cost.