Home-buying mistakes to avoid

By John Adams

For the AJC

If my guess is right, a lot of prospective buyers who have been sitting on the real estate fence will be thinking more seriously about a home purchase in the year ahead. And why not? Interest rates are still very attractive, prices are still competitive, and more buyers than ever may qualify for a substantial tax credit just for making a purchase.

With a little planning, inexperienced buyers can sidestep some common mistakes and make their home purchase a successful one.

Here are four home-buying mistakes you don’t want to make:

● Not getting prequalified by a reputable local lender.

Until you sit down with a reputable lender and tell him or her all about your financial situation, you are not in a position to even consider buying a home.

You can’t know what you can afford, and you can’t know how much you can likely borrow. In addition, a good lender will match various loan products to your personal needs. For example, if you only plan to stay in Atlanta for the next five years, you may save money with a 5 /1 ARM rather than pay a higher rate for a 30-year fixed loan.

● Not working with a real estate professional.

After you have met with a local lender, your next stop should be the office of a seasoned real estate professional.

Trying to buy a home without representation is like trying to tune up a car engine by yourself. Yes, it can be done, but there is no benefit in doing so.

If you end up buying a listed home, the seller will pay for all commissions. And if you end up buying from an owner, both of you will be fighting over the same dollars. Take my advice and ask someone you trust to recommend a veteran real estate broker.

● Failing to shop and compare.

The primary purpose of seeing more than one available home is to match your wants and needs with the features of the properties that meet your criteria. Because each house is unique, it pays to take some time to shop and compare until you find the best possible match.

In other words, don’t rush the process.

● Not buying by April 30 and missing a federal tax credit.

The $8,000 First Time Homebuyer Tax Credit and the $6,500 Repeat Homebuyer Tax Credit are both set to expire at the end of April of this year, although if you have a signed contract by that date, you can have until the end of June to get it closed. Don’t miss the deadline.

John Adams is an author, broadcaster and investor. He answers real estate questions at noon on Saturdays on WGKA, 920 AM.