Terrified to Buy a Home? Put Your Biggest Fears To Rest

Most first-time buyers are worried about making a mistake when taking on a huge financial and life-changing decision like buying a house. If that describes you, you’re in good company. After all, it’s normal to worry about major decisions like changing careers, moving to a new city, getting married, having a baby and, yes, buying a home.

The best way to quiet those nagging concerns is to learn more about how to avoid the pitfalls.

In the same way expectant parents often receive unsolicited (and unwelcome) advice on what to expect during labor and delivery, prospective homeowners are often pelted with ominous stories that belong more in the category of “Tales of Horror” than “Sound Advice.”

Anyone who is considering home ownership has undoubtedly heard at least a few bad stories. Your best friend knows someone who knew someone who had an awful experience. The Internet is riddled with tales of woe and warning, waiting to pounce upon a buyer trying to do some preliminary research. To really amp up any feelings of anxiety, try watching Tom Hank’s movie “The Money Pit”!

It’s okay. It’s going to be just fine.

Here are a few of first-time buyers’ most common fears and the information you need to feel more secure moving forward.

What If I Buy a House with a Problem?

Years ago, it was much more likely that a first-time buyer could end up purchasing a dud of a house—a real life money pit. Today, there are a number of tools—some required by lenders and insurers, and others available to buyers—that help ensure your home will be a sound investment, free of unexpected and unwelcome surprises.

Even if you are financing your purchase without a lending institution, you should have the following:

Home Inspection – Select an experienced, highly recommended home inspector. Ask for and check their references and talk to buyers who have already used their services. A good home inspector will let you know if the main systems of the house (electrical, plumbing, HVAC) have any issues, if there are water/radon problems in basement areas, and if there are structural issues with the foundation, roof, or other elements of the home. Hiring an independent and thorough inspector(s) can provide the information you need to buy (or make an offer) with confidence.

Title Search and Insurance – A title search ensures that the seller has a free and clear title to sell their home, that there are no liens against the property, and that there is no break in the chain of custody (meaning no lost records of ownership in the history of the property). Buying title insurance will protect you if, at a later time, a problem or error in the title is discovered.

C.L.U.E. Report – This report is compiled from a nationwide database of insurance claims over the past five years and will indicate if the owner has filed any claims during that time, such as claims for fire/water damage or mold/asbestos/lead paint remediation. In addition to providing more information on the property, a C.L.U.E. report can help you avoid purchasing a home that will cost an exorbitant amount to insure, or cannot be insured.

Survey – Sometimes buyers don’t see the property survey until the closing date. And sometimes those surveys don’t match the square footage reported on the house or other aspects of the property. Request your copy early to be sure there aren’t any issues that you, as a homeowner, may have to address after the sale. Examples include additions that weren’t permitted, fences that are on or past the property line, and easement issues.

Can I Lose My Earnest Money?

Working with an experienced, professional buyer’s agent will help ensure that contingencies are in place to let you out of the contract, with your earnest money returned to you, should problems arise. To avoid losing your earnest money, be sure:

  • Necessary contingencies are written into your contract when you make an offer.
  • You know, understand and meet the timing deadlines on the contract. Failure to do so can cancel the contract and forfeit your deposit.
  • You want the house. If you change your mind after making the offer, without a reason covered by contract contingencies, you will forfeit your deposit. After all, while the seller has been under contract with you, they’ve lost opportunities to sell to other buyers. (Note: If the seller incurs expenses that exceed your earnest money deposit, you may face a lawsuit wherein the seller attempts to reclaim expenses, like renting another place to live, moving expenses, and even legal fees.)

How Will I Know My Agent Has My Best Interests at Heart?

The primary reason buyers need a buyer’s agent is to ensure that their interests come first. Listing agents are, by definition, representing the interests of sellers.

Using a buyer’s representative means a real estate professional will have a fiduciary relationship to you, as a buyer. (A fiduciary is “a person bound to act for another’s benefit.”)

This relationship includes:

  • To use his/her skills on behalf of the buyer while following the directions/actions given by the buyer (so long as these are lawful orders).
  • To be loyal to the buyer and to place the buyer’s best interests above the agent’s own interests.
  • To keep the buyer’s information confidential, while disclosing any information received which may benefit the buyer-client.
  • Accounting for any and all funds entrusted to him/her by the buyer and to keep those funds separate from all other funds.

A real estate professional who has earned their Accredited Buyer’s Representative (ABR®) designation has completed special training in buyer representation and has extensive experience helping buyers navigate the home buying process, making it easier to purchase your first home worry free!