House hunting can be an exciting time for anyone. But it doesn’t matter if you’re buying a house for the first time or are a seasoned mover at this point, there are many common mistakes when buying a home that can lead to serious issues.
The biggest mistakes when buying a home aren’t just going to cost your bank account but also your peace of mind and sense of sanctuary. All too often, homeowners in Colorado make errors that aren’t just expensive, but also costly in terms of lifestyle and fulfillment.
You’re going to want to think in the long term here. Everyone is going to have different wants and needs when it comes to purchasing a home but in the end, you need to be sure that the home doesn’t just look and feel good in the movement, but for the long haul.
Homes are often one of if not the largest investments the average American will make in their lifetime. The decisions made surrounding them are too important to overlook. Below, we’re exploring the many mistakes to avoid when buying a home in Colorado.
Common Mistakes When Buying a Home Can Lead To Buyer’s Remorse for Coloradans
Considering 72% of home buyers in recent years have regrets about purchasing their new place of refuge, it’s important to take your time and get everything you can right. There are several common mistakes when buying a home that can lead to expensive and stressful situations down the line.
The repercussions can mean a variety of things, including:
- Financial stress and situations in which you may end up in greater debt.
- A lack of satisfaction because you fell in love with the idea of what the home could be and not the reality of the situation.
- Missed opportunities in the future. This can be anything from future investments due to your new financial situation to the ability to pursue other opportunities elsewhere having planted your roots in a place that no longer serves your needs.
Nobody has a crystal ball. Life is always changing in ways we can and can’t predict. But if you take the time to analyze the present and future a bit, you’ll likely be better off.
As was the case with the recent years of economic instability, a common recurrence throughout history shows that investors turn to real estate. This is a great play for many but it’s not for everyone and when you’re purchasing a home, it’s a serious, often multi-decade decision, you’re entering into.
Such is the reason you’ll find many Coloradans that bought their first home having regrets in the present. But again, mistakes when buying a home aren’t limited to new homeowners. Due diligence and planning can go a long way in making better decisions that best suit your needs.
Top 10 Mistakes When Buying a Home in Colorado
The bad news is that too often, homeowners make common mistakes when buying a home in Colorado. But the good news is that such mistakes are also largely avoidable if you keep them in mind. Nobody is perfect, but purchasing a home is a major life decision that deserves everyone’s fullest attention. Here are ten mistakes to avoid:
1. Purchasing a Home That Is Out of Budget
Easily, the biggest mistake when buying a home Colorado residents run into is not staying within their budget. This is a multi-faced issue which is part of the reason people often purchase beyond their means. Here are some of the pitfalls and considerations you’ll want to remember:
- There are a lot of different expenses that go into owning a home that goes well beyond a mortgage. These include PMI insurance, HOA fees, homeowners insurance, the cost of maintenance, and property taxes.
- What you are preapproved for and what you can actually afford in the long term may not always line up. Things change including budgets. Prepare accordingly.
- Speaking of, don’t forget to prepare for the likely increases that come with the future of homeownership. Property taxes may be some of the lowest in the Centennial State, but they will rise over time as your home’s value increases. The same goes for home insurance premiums and HOA fees.
- You’ll also want to remember closing costs. If you aren’t careful, your rainy day fund can be eaten up at the time you purchase your home, leaving your without funding should something arise down the line.
25% of Americans are considered “house poor” and the figure can rise even higher in urbanized areas, such as Denver. A whopping 30.2% of the residents calling the Mile High City are spending at least 28% to 30% of their income on their residence. Take your time, plan for the future, and purchase what you can afford.
2. Not Getting Pre-Approved for a Loan
If you’re a serious buyer and want to actually have a chance to buy a home, you’re going to need a pre-approval letter. Real estate agents and salesmen will need to have proof that you aren’t just looking to look and can actually purchase the home you are interested in.
Frankly, you’ll want to be pre-approved for as much as possible…so long as you can remember the first tip and avoid being sucked into purchasing a home you can’t actually afford. You’ll also want to shop around when getting pre-approved to compare interest rates from different lenders.
3. Rushing the Process
A large part of why people make common mistakes when buying a home in the first place is a lack of patience. Don’t get us wrong, it’s important in competitive markets to act, but for best results, you still want to conduct due diligence. Rushing into a situation can cause you to skip steps, miss things you ordinarily wouldn’t, and ultimately, end up in a home that doesn’t suit your needs.
4. Not Hiring a Home Inspector When Buying a New Construction
One of the biggest mistakes when buying a new construction home is forgoing the home inspection. It’s new, so many Colorado homeowners assume that everything is in working order. But mistakes happen. Even taking out of the equation scam artists and people who don’t simply care, people make errors.
When you’re sinking this much funding into an investment, be sure you know that you know that all is right with your purchase. Just as important, be sure that the home inspector you hire is reputable and capable of getting the job done.
5. Choosing the Wrong Neighborhood
Sure, the up-and-coming part of town that has more cocktail lounges than daycares may be ideal today, but if you’re planning on starting a family soon, it might not be the best long-term solution. Furthermore, you’re going to want to do your research on whether your immediate place of residence has the right amenities and HOA fees for your lifestyle and budget.
6. Not Controlling Your Emotions
Similar to rushing when buying a home, not controlling your emotions throughout the home-buying process is bound to lead to even more mistakes. Feelings can cloud judgment and lead to reactions based on what you wish to happen rather than what will happen in reality.
Even if you aren’t going to live with them, it’s a good idea to bring along a trusted party when shopping for homes. This can be a great way to get another perspective and even provides the opportunity for someone to play devil’s advocate and help ground you.
7. Not Paying Attention to Details
Encompassing a variety of common mistakes when buying a home in Colorado is the lack of attention to the fine details that home buyers apply during the process. Here are a few areas to pay extra attention to:
- The terms of your mortgage.
- How much money you’re needed to provide at closing.
- Penalties, HOA fees, dates, and timelines that dictate the timing of your close and how much you’ll spend.
Know the contingencies in place that will be necessary to make sure the deal goes through.
8. Making a Major Purchase or Life Change
There comes a time in which you have to take chances. This can mean starting businesses, purchasing the car of your dreams you can now afford, making a career change, and more. But when you’re purchasing a home, this isn’t the time to do so.
Anything that affects your income or credit, such as quitting your job or opening a new line of credit, is going to be a major red flag for lenders. Even if the change is seemingly positive, issues can arise.
Your best bet is to avoid anything your real estate agent deems inappropriate. Purchasing a home is a time in which your finances are going to be under major scrutiny. One wrong move can ruin the entire deal. Be sure to act accordingly and avoid mishaps that could cause you to lose your home.
9. Not Working With a Real Estate Agent in the First Place
Leaning on someone throughout the buying process is important for Colorado homeowners and that’s because a lot can happen. Each home is different as are the circumstances of the purchase. This can mean a list of variables too long to list will be in play that will affect your experience.
Real estate agents in Colorado are prepared to handle such matters. Not only do you gain expert advice and an extra person in your corner to help get things done, but you’ll also gain a bit of a buffer that can be critical during the buying process. From time-sensitive paperwork to handling the unexpected and more, a good real estate agent is critical for success.
10. Enrolling in the First Home Insurance Company They Find
It may be the first company offered through a referral, or maybe it’s just the largest brand with the most commercials. Either way, many homeowners simply find a company that is readily available, sign up, and feel good about the decision. But doing so can lead to a variety of issues:
- Because homeowners in Colorado all have different needs, it’s important to be sure you’re protected by a company that provides the right coverage for your needs.
- Furthermore, everyone has different factors and each company has different calculations that are going to affect your rates. Signing up without shopping around means you may overpay for coverage.
If you want to save money and stay better protected for what may come your way, taking the time to compare and shop multiple carriers is going to go a long way.
How To Protect Yourself From a Huge Home-Buying Mistake in Colorado
Educating yourself on the common mistakes when buying a home in Colorado many make will go a long way, but you’re also going to need to take meaningful action:
- Make a budget and game plan and stick to it. Getting pre-approved is great, but without a budget in mind, you could find yourself in an uncomfortable place sooner than you think post-purchaser.
- Always use professional help from those you can trust including realtors and trusted inspectors.
- Take your time and stay present in the moment. It’s easy to get swept up, but important to be realistic about your purchase.
- Think about today but also plan for what your life will look like in the future.
- Finally, always shop around for coverage before signing up for home insurance.
Freedom Insurance Group helps homeowners in Colorado save on coverage because we don’t just represent one brand but many top-rated carriers. By working with many different carriers, our partnerships allow homeowners to compare coverage options and pinpoint the cheapest choice in the market.
Buying a home is a big decision and staying protected with home insurance in Colorado is important for everyone. On average, we help homeowners save 40% and can provide you with a wide range of coverage options, discounts, and bundles that meet your needs.
To avoid one of the common mistakes when buying a home in Colorado, be sure to shop your coverage and pay less. Contact us at the number above, or get a free, accurate homeowner insurance quote today!