On average, prospective homebuyers take anywhere from six weeks to six months to purchase a home in the U.S., as reported by the Home Buying Institute (HBI). The process can be shorter or longer depending on factors such as the amount of time devoted to the home search and how quickly they are pre-approved for a mortgage. Once the purchase is made, the average American homeowner lives in that house for about 13 years, as per the National Association of Realtors (NAR). Nevertheless, the duration can be shorter due to different factors, including foreclosure, an undesirable neighborhood, or a house in need of many repairs. However, these types of problems can be avoided by a thorough and careful house search.
Here’s a look at four common house-hunting mistakes, along with tips on how to avoid them.
Not Sticking to Your Budget
As of 2019, the average cost of buying a new home in the U.S. was $383,000, as published on Statista. This amount is a significant cost for most Americans, considering more than 1.3 million people earn below the minimum wage, as reported by the U.S. Bureau of Labor Statistics (BLS). You should only buy a home that you can comfortably pay for to avoid financial struggles and prevent the bank from foreclosure due to missed mortgage payments.
Ignoring Flaws in the Important Features
Generally, finding a home that perfectly suits your criteria can be difficult. While it’s okay to compromise on the minor features such as interior décor and flooring, you can easily find yourself overlooking the flaws in some of the important features, and this may cause major problems in the future. For example, a home that has a poor drainage system can cause expensive water damage. When searching for a house, you should make sure that all the crucial features are correct to prevent future damages and costly repairs. Other important features to consider when searching for a home include the size of the house, the type of roofing, and the number of rooms.
Not Waiting for Mortgage Pre-Approval
Before approving your mortgage, the lender considers several factors, including your credit history, credit score, income stability, and the amount of mortgage applied for, as reported by the Consumer Financial Protection Bureau (CFPB). In other words, you won’t be eligible for a mortgage if you don’t meet your lender’s criteria. To be on the safe side, you should wait until the lender pre-approves your mortgage before starting negotiations with the seller. By doing this, you will avoid buying a house out of your budget in case the lender fails to approve the mortgage or approving a mortgage for a smaller amount.
Overlooking the Neighborhood
It’s possible to find your preferred home in a high-risk neighborhood, and this can make your life difficult. Typically, an area prone to crimes or natural disasters can lower the value of your home, which could cause you to lose money when you sell the home. Additionally, your homeowners insurance rates could be significantly higher if your home’s location is considered risky.
When house hunting, avoid these four common house hunting mistakes. Equally as important is purchasing the right homeowners insurance policy for your new house. CF&P Insurance Brokers will help you get the perfect high-value home insurance policy. Call (925) 956-7700 today for your free quote.