Mistake _11. Getting Family, Relatives, and Friends Too Involved

Not involving family or friends can sometimes be difficult. If mom and dad are putting up the down payment or cosigning on the mortgage, then they’ll be a big part of the deal. Otherwise, getting too many opinions can be worse than no opinions at all. Often, those whose opinions you seek will see your enthusiasm and support your decision, even if it’s a bad one. Or people who don’t know what they’re talking about will point out problems and bad mouth a good home.
Greg and Linda found this out when they bought their first home. Naturally, they were excited and wanted to get as many friends and relatives involved as they could. Unfortunately, it didn’t work out quite as they hoped. The more friends they took through the home, the more confused they got. Some friends loved it, others didn’t. One uncle even told them they were making a big mistake by moving into that neighborhood. After a week of getting bombarded by mixed messages, Greg and Linda developed such a bad case of buyer’s remorse that they called their agent and told him they were backing out. They couldn’t stand the pressure and would gladly forfeit their $500 deposit. So how do you avoid this situation?
First, rely on your agent, who is a professional and knows the areas and pitfalls.
Second, trust your own research. You’ve undoubtedly looked at a dozen or so homes in your price range, so you should have a pretty good idea of values and neighborhoods by the time you’re ready to make a decision.
Third, when you find a home you want to make an offer on, the last thing you want to do is involve Uncle Louie or Cousin Joe, who happens to be a contractor. Now matter how good they are, builders or contractors are not professional home inspectors. They may be skilled in their particular trade, but they’re not trained to find the potential problems a professional home inspector is. Don’t make the mistake of trying to save a few hundred dollars by short cutting the inspection process. Having anyone other than a professional inspect the house and give you a written report can come back to haunt you. Going back to the seller with a written report from a pro that the roof needs to be replaced carries some weight. Going back and telling the sellers that Uncle Louie says you have a bad roof doesn’t quite cut it.
The bottom line is to go with the advice of your buyer’s agent and home inspector; they’re the pros who can help you the most. If you want to involve family, relatives, and friends, have a barbecue at your new house after they help you move in.

Mistake 10. Not Protecting Yourself When You Make an Offer

Many homebuyers, in the excitement of finding their dream home and writing up an offer, forget to add contingencies that will protect them. A contingency is a clause that is added to an offer to make it subject to a certain event. Common contingencies are financing approval, house inspection, closing on a certain date, and replacing a roof. It’s true that some contingencies will weaken your offer, such as selling your house first or adding a list of repairs. But there are others that you need to add to protect yourself.
For instance, one buyer’s agent insisted on putting in a ‘‘subject to final loan approval contingency’’ in her client’s offer, even though he was approved for a mortgage. Unfortunately, two days before closing, the buyer was laid off his job due to downsizing, eliminating any chance of final loan approval. His agent saved him from losing a $1,000 deposit.
The most critical clauses you should consider adding are:
Always make your offer subject to a professional inspection. If you find problems, then you have some leverage to fix them or walk away and get your deposit back.
Making your offer subject to final loan approval will protect you from something unforeseen. For instance, should you get laid off during the loan process, you’ll lose the chance to buy the house but not your deposit.
If you’ve made an offer on a new home and your old home hasn’t closed yet, add a clause making it subject to closing the old house and funding.
You want the offer subject to the home appraising for at least the sales price. If the appraisal comes in low, you’ll have the option of negotiating the lower price or walking away. Along with final loan approval, inspection contingencies are the most important protection for a homebuyer. In one particular case, a home inspector found a cracked combustion chamber in the gas furnace. This can allow carbon monoxide to escape into the house with lethal consequences. The sellers quickly had the furnace replaced and the deal closed. Luckily, a potentially serious accident was avoided. In another case, an inspector found problems with the wiring. It was not only old, but the owner had tried to cut costs and do some rewiring himself. The wiring was not only not up to code but was dangerous, with illegal splices and unconnected hot wires in the attic. In this case the buyers simply negated the offer and got their deposit back because it was subject to a satisfactory inspection.