17 Dumb Home-Buying Mistakes That Hurt Your Wallet

17 Dumb Home-Buying Mistakes That Hurt Your Wallet

Take your time making the biggest purchase of your life.

By Daria Uhlig June 29, 2021 Real Estate Investing 101

Of all the investment decisions you're likely to make in your lifetime, a home purchase is by far the most personal. It's no wonder that buyers are eager to rush right into the real estate market the moment they realize they're in a position to buy. But because the purchase will likely be the most expensive one you ever will make, it's important to organize your priorities and your finances before you jump in.

Keep reading to learn about home-buying mistakes that can hurt your wallet — and steps you can take to avoid them.

Ignoring Your Credit

Strong credit can save you thousands of dollars in interest over the life of your mortgage loan. Credit problems can take time to resolve, so the earlier you start reviewing your credit, the better. The first step is to order a credit report.

You're entitled to one free report per year from each credit bureau, which you can order from AnnualCreditReport.com. However, through April 2021, all three credit bureaus — TransUnion, Equifax and Experian — are offering a free weekly online report to help you stay on top of your credit during the COVID-19 pandemic.

If you spot signs of trouble or inaccuracies, contact the appropriate credit bureau as soon as possible. Things to look for include:

Outdated information, such as a closed account that's being reported as open

Incorrect contact information

Accounts you didn't open

Accounts listed multiple times

Also, be on the lookout for old collection accounts you need to pay off. If you moved, for example, your final utility bills might not have reached you and a balance could remain, even though the account is closed.

House Hunting Without a Buyer's Agent

It might be tempting to go at it alone, armed with information available on the real estate portal sites. That could be a big mistake. Online sites let buyers view the inventory of properties on the market, but they aren't a substitute for a professional's knowledge.

A buyer's agent who knows your local market can prepare a comparative market analysis to determine an appropriate offer price for the home you're most interested in. They'll also negotiate on your behalf to make sure your best interests are protected.

In many cases, your buyer's agent is your only fiduciary in the real estate transaction, meaning the agent is the only professional you'll work with who has a legal obligation to put your interests above their own. What's more, the seller typically pays the buyer's agent, so you've got nothing to lose by arming yourself with professional representation.

Shopping With Your Heart vs. Your Head

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