How to Avoid the 10 Biggest Mistakes Buying a New Home
Mistake No.1 – Not Targeting Your Search:
Location, Location, Location
Looking for a place to live can be intimidating when confronted with the
enormous range of options and tradeoffs available. Thus, it is critical to focus
on a limited number of locations well matched to your most important priorities.
Otherwise, you risk the common mistake of going in too many unproductive
directions, and being pressured into making a less than optimal decision where
burn-out starts to set in.
The first obvious step is to define your price range. This can easily be done by
visiting one or more mortgage brokers, your accountant, or on-line financial
service sites. However, regional cost factors such as taxes, transportation,
private schools, college tuition and insurance can vary significantly and need
to be considered.
The next step is to identify the location characteristics most important to you
and/or your family’s special needs. The ‘Location Checklist’ in this section
helps accomplish this by providing a comprehensive set of criteria that can
effectively target your search. Each criterion should be scored from 1 to 5,
with ‘1’ representing unimportant and ‘5’ representing highly important. In
addition, Fatal Flaw designations (FF) should be made for any criterion that
must be fully addressed before a home location could be considered a viable
option. For example, if you know that you would only consider a strictly limited
set of school districts, schools should be designated with a ‘FF’.
Your scoring should take into account the results of any research or other
insight you have gained regarding local attributes. For instance, research may
reveal specific locations where homes sell much faster and at higher
appreciation. In other cases, research may show higher property value based on
regionally important factors such as proximity to mass transit, desirable school
district, lower crime rates, or arbitrary perceptions of higher “cache”.
Once you have completed the checklist, it provides an excellent guide for you
and your real estate agent to pick locations that will best meet your needs.
It’s important to recognize that scoring too many criteria as high priority or
fatal flaw will not help you or your agent effectively target your search.