taxes, insuring your home against disasters, paying HOA or condominium fees, and making whatever repairs the property requires.
Mistake #3: Not Knowing Your Credit Score
Many buyers don’t bother looking into their credit score when making financial preparations for their home-buying experience, but if you decide to apply for a mortgage loan without checking your credit score, you could end up paying a lot more than you expected. It’s best to get a credit check beforehand. Good credit is a critical component in applying for a home loan, and there are steps you can take to repair any potential credit problems that crop up, as discussed in a previous chapter.
Mistake #4: Disregarding Local Housing Market Trends
Many buyers don’t pay attention to local housing market trends, which is a big mistake. Why? The housing market fluctuates over time; it’s just how real estate works. Sometimes, it favors buyers (a buyer’s market), and sometimes it favors sellers (a seller’s market). Further, sometimes the market can shift dramatically over a three- to six-month period. Several factors affect housing market trends, including the ratio between supply and demand, interest rates, and the overall condition of the economy. It’s imperative that you pay attention to these trends, and to consider how the housing market changes in your ideal location, as home prices vary from one location to another. Stay on top of comparable sales in the area: If homes sell for below listing price, it’s likely a buyer’s market; if homes sell above listing price, it’s likely a seller’s market. This information is useful when making offers, allowing you to calibrate your proposal to better suit the market and, if you’re lucky, your budget.
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