In the March 15 Issue of Consumer Reports, the magazine devoted much of the issue to real estate. The reporter noted 5 important home buying blunders that are commonly made by buyers in hot markets. Here is a recap, and some of my own insights.

Rushing into a deal:

This is a costly mistake that is easy to make, especially in a sizzling market such as North East Portland! You’ve all heard about it; you are finally ready to start looking for a house, and a property comes into the market on Saturday with an Open House scheduled for the following day. You attend the Open House, and whoops! The property  already has  two offers on it that are being presented on Monday morning at 10:00 AM! What’s with that! Did you miss it? And you jump into the game, and make an offer quickly, $10,000 over the asking price. The message here is: Don’t RUSH into an offer before you have looked at several if not lots of houses. This may be a perfect house, but your market knowledge should give you the confidence to know if you would be paying too much for it because you got emotionally invested in that particular area.

Biting off more than you can chew!

While I agree that this is a home buying blunder, I don’t agree with the comments made in the CS article, at least in Oregon. It is vitally important to your investment in a new home that you understand the costs associated with making an offer and buying a home; even more importantly, it is vitally important that you understand the cost of home stewardship. Don’t rely on a reporter’s statement that ‘fees are negotiable’. While some of them might be, don’t rely on fee negotiation to be able to close your purchase. Understand the cost of your mortgage, the costs of the property inspection and appraisal, the cost of repairs. If you can’t really afford to pay these items yourself, in the process of the purchase, you might not be shopping in the right price range. Home ownership has many many benefits, but you have to pay to play.

Failing to upgrade your credit score:

The easy answer is this: Don’t shop for property before you understand the impact your credit score has on your ability to buy a house, have corrected any problems with it or a low score. A mortgage broker is your best ally in this area. Get a referral to an excellent one and reveal to him the good, the bad and the ugly…..or your shiny halo. Start with a referral from your Realtor, and get one other mortgage pro to give you a second option. Tell them everything! They are not here to judge you….their job (and how they get paid) is to provide you with the best loan option and interest rate in the market, provide you with excellent service by giving you weekly updates on your loan process, and working hard to close the deal on time.

Skipping the Property Inspection:  If your Realtor allows you to make this extremely costly mistake, RUN away! The property inspection is where you get information about the house, not just repairs that may need to be done; information on where the electrical panel and water shut off are located, what is in the crawl space and other important stuff.