With so many factors to include on your house-hunting to-do list, it’s easy to forget about some of the sneakier financial blocks. Namely, deal breakers that creep up even as you’re patting yourself on the back for your excellent credit score. Whether you’re seeking homes for sale in Seattle, WA or in the Northeast, here are some of the more surprising home finance snags that may ruin a deal (plus how you can avoid them!).
Ignoring overdue fees. Say what now? Yep, that copy of Lolita you’ve been meaning to return to your local library could impact your credit score, which may impact your ability to qualify for a home loan (can you say domino effect?). Though a small overdue fee may not seem like much to worry about ($5 and some change isn’t breaking the bank, after all), if an unpaid fine of any amount is reported to the credit bureaus, your score will suffer. Check your credit score regularly and comb your credit report for errors or negative marks to avoid a plummet.
Not keeping up with credit housekeeping. Now that you’re thinking about credit, maybe you’ve realized you have a few more credit cards than you’d like the seller to see. Time to shut ’em down before they check your credit, right? Not so fast. Closing down multiple accounts could actually ding your credit. Credit is composed of a few key components, the age of an opened account being one biggie. Shutting down multiple accounts will also lower your credit utilization rates, which can be yet another credit killer. Research the impact of any change to your credit before taking action.
Underestimating the true cost of your monthly mortgage payment. The cost of homeownership spans far beyond a monthly mortgage check. There are HOA fees, maintenance costs, PMI, etc. Before you agree to the asking price, make sure you’ve calculated — and recalculated — whether the cumulative costs will be feasible. You don’t want a nasty surprise when you finally crunch your numbers (and neither does the seller) and realize they don’t fit within your current financial circumstances.
Forgetting the true cost of a swimming pool. Along the lines of maintenance costs, remember that you’ll have to spend much more time and money on the dream house with a pool in the backyard. If you simply don’t have the budget for a home with a pool, communicate this to your agent before you start looking at houses. The last thing you want is to end up falling in love with a home you simply can’t care for (but if you do, remember, you can always turn that old pool into a sunken patio).
Focusing on wall colors. We’ve all seen House Hunters, and we’ve also all yelled in disbelief at the buyers who pass up a perfect location because they’re not so happy with the idea of red walls and black carpet. While clashing aesthetics can be jarring, ignore these things at an open house and don’t let them detract from the true value of a home. Walls can be painted.
Assuming chandeliers (and other add-ons) are part of the deal. In love with the seller’s chandelier in the foyer? Make sure you and the seller agree on exactly what will be included — and what the seller will be taking to their new home sweet home. Things such as light fixtures are often assumed to be a part of the package, but if it’s an heirloom chandelier from the seller’s great-grandma, chances are, they’ll consider it fair game to take when they go. Set out clear expectations of what’s staying and what’s going to avoid any confusion or upset.
Requesting too much privacy. If you’re looking at homes for sale in San Francisco, a city known for its incredibly competitive housing market, refusing to fill out blanks (such as your Social Security number) or denying access to certain information often means that those who are willing to share will be the ones snagging the house. While sellers can legally request such info to verify your identity, you also have the legal right to discuss the ways they plan to keep the information safe. It can be a challenge, but that doesn’t mean you can’t reach an understanding together!
Ignoring your online presence. On the other hand, the sellers will have some personal information, including your name, which means they can easily perform a Google search and do a little online stalking. The housing market is fast-paced and snappy. Sellers have their pick of very similar offers. It’s always safe to prepare your online presence in the event you’re Googled by the seller, so the first thing they’re seeing isn’t an epic lampshade-on-the-head photo from your college days. Take steps to make sure your social profiles are cleaned up and your privacy settings are updated.
House hunting can be tough, but with a little preparation, things can go relatively smoothly. Besides avoiding the above snafus, do your market homework! It’s extra effort, but staying current on trends can get you ahead of the curve. Then once you do have an offer out there, stay flexible. Some things may arise that are out of your control. How you respond can ultimately sway the outcome — and hopefully get you the house of your dreams.