Top 12 House-Hunting Mistakes

Buying a home can be stressful. Since homeownership has far-reaching implications, it's important to keep your emotions in check and make the most rational decision possible. Finding a home at a price you can afford is likely your goal, so it's important to avoid these house-hunting mistakes.

1. Looking at More Than You Can Afford

If you can't or won't be able to afford the house you've found, you're just hurting yourself by imagining yourself in it. Restrict your house shopping to properties in your financial range. Start your search at the low end of your price range. Remember, when you spend another $10,000 to buy a home, you're not just paying an extra $10,000; you're paying an extra $10,000 plus interest with your mortgage.

2. Skipping Mortgage Pre-Approval

What you think you can afford and what the bank is willing to lend you may not match up, especially if you have poor credit or unstable income. Make sure to be pre-approved for a loan before placing an offer on a home—or even before you go house-hunting in earnest. If you don't, you'll be wasting the seller's time, the seller's agent's time, and your agent's time if you sign a contract and then discover later that the bank won't lend you what you need.

Be aware that even if you have been pre-approved for a mortgage, your loan can fall through if you do something to alter your credit score, such as finance a car purchase. If your actions cause the deal to die, you may have to forfeit any deposit or earnest money you put up when entering the contract.

3. Acting Too Soon

You'll probably have to make some compromises to be able to afford your first home but don't make a compromise that will be a significant strain. Unless you are a high-end buyer looking at custom homes, the chances are that you will be able to find a selection of homes in your price range.

Being open to continuing your search will save you from rash decisions you might regret later. Many real estate websites can help you streamline the house-hunting process, making it possible to preview hundreds of homes within a few hours from the comfort of your couch.

4. Acting Alone

Don't walk into an open house without a real estate agent or broker. Agents are held to the ethical rule that they must act in both the seller's and the buyer's best interests. You may not be in the best bargaining position if you start dealing with a seller's agent before having one of your own. Roughly 86% of buyers use a real estate agent or broker, according to a 2022 survey from the National Association of Realtors.

5. Lacking Vision

Distinguishing between what's fixable and what is not is important. Even if you can't afford to replace that hideous wallpaper in the bathroom right now, it might be worth it in exchange for getting into a house you can afford. If the home meets your needs in terms of location and size, don't let physical imperfections turn you away.

At the same time, don't be fooled by minor upgrades and cosmetic fixes that sellers have staged. Doing home upgrades yourself, even with a contractor, is often cheaper than paying the increased home value to a seller who has already done the work for you.

6. Overlooking Flaws

Look for homes whose full potential has yet to be realized, especially if you're on a strict budget. Don't buy a fixer-upper that's more than you can handle in terms of time, money, or ability. If you think you can do the work yourself but realize you can't once you get started, any repairs or upgrades you plan to make should be in your budget.

7. Ignoring the Neighborhood

Don't just focus on the residence—look at the surrounding area. It's impossible to predict the future of your chosen neighborhood, but you should consider:

• What kind of development plans are in the works for the neighborhood?
• Is the street likely a popular rush-hour shortcut?
• Is there talk of a bridge or a highway to be built?
• What are the zoning laws in the area?
• Is there a lot of undeveloped land around? What is likely to get built there?
• Have home values in the neighborhood been declining or rising?

8. Rushing an Offer

It may be necessary to make an offer fast if you find a home you like in a hot market. However, don't neglect the necessary steps, such as ensuring the neighborhood feels safe at night and investigating noise issues like a nearby train. Taking the time to weigh your decision allows you to research how much the property is worth and offer a reasonable price.

9. Dragging Your Feet

It's a tough balancing act to make sure you make a careful decision, but don't take too long to make it. The more time and energy you have to take out of your everyday activities to search for a house, the less time and energy you have available to meet other obligations. If you don't pull the trigger quickly, someone else might, and you'll have to keep looking. Don't underestimate how time-consuming and routine-disrupting house shopping can be.

10. Offering Too Much

It's easy for buyers to get sucked into a bidding war. If the house doesn't appraise at or above the amount of your offer, the bank won't give you the loan unless the seller reduces the price or you pay cash for the difference. When you sell the house, if market conditions are similar to or worse than when you purchased, you may find yourself upside down on the mortgage and unable to sell.

Make sure the purchase price for the home you buy is reasonable for both the house and the location by examining comparable sales and getting your agent's opinion before making an offer.

11. Neglecting to Inspect

You found the perfect place, the offer was accepted, and you're in contract. It's tempting to think you're a homeowner the moment you go into escrow but hold on. Before you close, you need to know the condition of the house.

That's why you need a thorough inspection of the property and your mortgage lender might demand it. Keeping your feelings in check until you have a complete picture of the house's physical condition and the soundness of your potential investment will help you avoid making a serious financial mistake.

12. Getting Desperate

When you've been looking for a while, and you do not see anything you like—or worse, you're getting outbid on the houses you do want—it's easy to get desperate to find your new home now. If you have time, wait until something suits you. If your demands are realistic for your budget, find something you can live with. New houses come on the market every day.

The Bottom Line

Buying a house is a big decision and buyers need to ensure they are making rational choices. A prepared buyer can protect themselves from costly mistakes and shop with confidence.