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Florida Today

Learn From Other's Mistakes

By Anne Straub

When long-time renter Trilby McGee decided the time was right to buy a house, she armed herself with information. “I was all over the Internet. I have a whole notebook full of organized paperwork,” McGee said.

The Melbourne woman is one of many first-time buyers who are moving from the sidelines into Brevard County’s red-hot market. She compared information from different web sites and studied glossaries of terms.

“When I talk to a lender or Realtor, I want to know what they’re talking about,” she said. The work paid off. Trilby made an offer on a house last weekend. “I didn’t feel scared or uncomfortable,” she said.

Her preparation already has gone a long way to helping her avoid common home-buying mistakes. To make a home-buying experience go smoothly, local real estate agents recommend avoiding common pitfalls. A few of the common ones:

Looking at homes before prequalifying. Buyers who find a home they want before they know how much mortgage they’re likely to qualify for often find themselves disappointed. Realtors advise buyers to talk to a lender before shopping so that they have a price range to work with.

Lorene Shafer, Realtor for DeForest Realty in Titusville, likes to leave some breathing room at the top of that range. That will leave new buyers with some money for furnishing the house to their tastes, she said.

Trilby did one step better than prequalifying. She was already approved for her loan when she went shopping. “I read that was the best thing to do first,” she said.

Running up debt. Young couples in particular can be tempted to overspend, putting their mortgage approval at risk. Lenders look at the amount of debt a mortgage applicant has when deciding how much money to lend.

“They run out and buy a new car because their car won’t look good in front of the house they’re going to buy,” Shafer said. “Then they have a big payment and can’t qualify for the home.”

Failing to look ahead to resale. Many factors make a house desirable to a large number of buyers, and the top one is location. Research the neighborhood and look into zoning restrictions, as well as proximity to shopping, churches and medical facilities, advises Kimberly Turner, broker owner of Century 21 The Turner Group in Melbourne.

Even if you don’t have children, check the quality of schools. People like to buy in an ‘A’ school district because of the appreciation potential, Turner said.

If the home is in a new subdivision, don’t plan on a quick turnaround. “The builder is going to be competing with you if you go to place it on the market” before the neighborhood is built out, she said.

Look at the functional flow of the house, Turner said. It should fit today’s standards of an open floor plan rather than having boxy, closed-off rooms.

Also consider where the house falls in the price range of the neighborhood. “You don’t want to buy the highest-price home in the neighborhood,” Shafer said. If you make any improvements, you’ll have a hard time getting your money back out when you go to sell.

“You have to look at a house as an investment. With a car, it’s a necessary evil that you have to have it, use it and get rid of it. You don’t expect it to be as valuable when you get done with it,” Shafer said. “With a house, you do.”

Ignoring construction quality. Look for water stains on the ceiling and baseboards and beware of mold. If you see excess light around doors and windows, that means water could get in, too, and water damage could be an issue, Turner said.

Make sure any major renovations or expansions were done with a permit and according to code, Shafer said. If not, the buyer could run into problems with financing.

Construction quality should be a buyer’s top concern, Shafer said. “Experienced buyers, after a couple months, will learn that,” she said.

Getting emotionally attached to a property. Buyers who have their hearts set on a particular home are always in a dangerous situation, but especially in a market like today’s. “Nowadays, you put in a full-price offer and somebody’s already beaten you to it,” said Bonnie Cameron, broker for Cameron Realty Group Inc. in Melbourne.

Keeping a clear head during negotiations will be easier if you don’t make offer inclusive of personal property. Turner has seen buyers and sellers get sidetracked over items like a dining room chandelier, garage freezer, or the pool table in the bonus room. “These should not be deal breakers,” she said.

Look at extra features last, after location, floor plan and the condition of the home, Turner said. A dramatic fireplace, gourmet kitchen or hardwood floors can woo a buyer. But those should be seen as a bonus. “The extra features that a house has should be looked at last, not first, after location, floor plan and construction,” Turner said.

Moving too fast. Buy a home just because it looks like a bargain and you might find out too late why the price was low, Turner said. She advises touring a house at least twice, and driving through the neighborhood at different times during the day. That will give you a feel for whether there’s a lot of traffic, children in the neighborhood, streetlights for security, or whatever your concern might be. That’s particularly important for people moving from other areas who aren’t familiar with Brevard neighborhoods, she said.

Neglecting contingencies in the purchase offer. Buyers often add clauses to their offers, usually for a professional home inspection, financing approval and possibly the sale of an existing home.

Making a purchase offer contingent on a satisfactory home inspection can help protect the buyer from hidden problems with a home. If the inspector finds a flaw, the buyer can use the leverage to negotiate a lower price, Cameron said. If you need to sell your current home, add that as a contingency or you could end up carrying two mortgages, Shafer said.

Competition for properties means buyers should try to limit the contingencies they put on an offer. “In today’s market, the fewer contingencies you put on a contract – except for the ones you really need to protect yourself – the better off you are,” Cameron said.