Home buying problems can be avoided

How to avoid trouble and common problems when buying a home

Buying a house is a lengthy, complicated, expensive procedure. It’s not something you do on a lark, and fortunately, it’s not something that you do very often. On the rare occasions when you do buy a house, you want to make sure that you get one that suits you well, is affordable, and doesn’t come with a number of legal problems attached to it. But many people find the process to be anything but a smooth one, no matter how hard they try. In order to avoid common problems when buying a house, you need to be prepared. Some of that preparation is mental; you simply need to know what to expect.

Here are a few common problems that people encounter when buying a house and what you can do to avoid them:

• Get preapproved for a loan. The prices of homes have stabilized in most markets, and houses are no longer attracting multiple offers the very day they are put up for sale. But you can still lose out on the house of your dreams by failing to have financing in place ahead of time. It’s not enough to have a letter saying that you are “pre-qualified”; you want to be able to demonstrate that you are approved and can get the financing right away. Before you start to seriously house hunt, meet with a lender, discuss how much you can borrow, and get approved for the loan. Once you do that, you can shop for that house secure in the knowledge that it won’t get away for lack of financing.

• Location, location, location - The old adage applies; it’s where the house is located that matters. If you buy the house of your dreams and then realize that the 60 mile commute to your new job is less pleasant than your new hot tub and gameroom, you have a problem. The house needs to be where you need to be. It also needs to be where prospective buyers are, should you need to sell later. Don’t overlook location.
• Legal problems - We have said it before: hire an attorney for your real estate transactions. Is it required? No. But your signature on the loan documents obligates you to abide by whatever it says, and if you haven’t read, understood and agreed with every word on the document, you are still responsible if you put your name on it. The few hundred dollars it may cost you to hire an attorney to look over your paperwork could save you thousands of dollars later.
• Double check appraisals and title issues - Appraisal fraud and mortgage fraud are common. Many appraisals are artificially inflated in order to make sure the sale qualifies for financing. On other occasions, the appraisal is inflated as part of the scheme to defraud the buyer out of money. How can you tell the difference? You may have to do some homework yourself, checking out past sales in the neighborhood and verifying that the property values are legitimate. 

There are many problems that can arise when purchasing a home. By being prepared and knowing ahead of time what you might expect, you’ve won half the battle.