First Person: 6 Ways to Screw Up Your Home Purchase

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You don't buy a home every day; and this market requires a certain learning curve for homebuyers everywhere. I can say this, because as an agent, I saw six home buying blunders on a regular basis, even when working with educated buyers who had bought and sold several homes in their lifetime. Still, trust me on this; you don't want to make these six costly and time-consuming mistakes, at least, not if you can help it.

Believing that the listing agent is your friend.

Most real estate agents are friendly people. They have to be; they are in sales. All the same, that doesn't mean that the listing agent (who represents the seller) has your best interest at heart. The listing agent -- the agent whose name is on the sign -- is a stand-in for the seller. They don't represent you. Their first fiduciary duty is to take care of the seller's interests first and foremost, not yours.

My advice: Hire your own agent. They represent you, not the seller. Hiring your own agent doesn't cost a dime; the seller pays their commission when you close.

Setting an unrealistic timetable.

Setting an unrealistic timeline is a mistake I saw homebuyers make quite frequently. In a garden-variety sale, you can probably close 30-days after signing your contract to purchase, however, 45 days is more common these days -- thanks to lender restrictions and tightened guidelines. For complex transactions like short sales or foreclosures, you should anticipate at least 60 days to close.

My advice: Assume it will take at least 60 days to close on any transaction, and don't make plans to actually close until you get the call from the title company, telling you that your closing documents are ready.

Not shopping lenders.

All too many homebuyers I worked with would talk to one lender and hire them on the spot. This is not a smart move. The financing part of any real estate transaction is the most complex, but it's also where you are most likely to be ripped off. Never go with the first lender you talk to.

My advice: Educate yourself on the process (with the internet, there is no excuse not to) and shop three to four different lenders ahead of time. Before you go house hunting, make sure you have a pre-approval letter in hand from one of them.

Trash talking and lowballing.

I get it. You want a good deal. Who doesn't? However, buyers will sometimes forget their manners during a real estate negotiation, when emotions run high. Saying that a seller has ugly paint or countertops, and using that as a negotiating tactic or as an excuse to lowball your offer is just rude.

My advice: Be respectful. Mind your manners. Use comparable homes as a guideline for your offer, and don't expect to get something for nothing. I would my buyers to think like a seller. That helped.

Not getting professional advice.

Would you go in for heart surgery without asking a few questions of the surgeon? Probably not, even if that advice cost you some cash. In my experience, the right professional advice saves more money than what it costs to get the advice in the first place. Not have a real estate agent to represent you, not seeking advice from a real estate attorney or not listening to an appraiser is a big mistake.

My advice: Budget for a real estate attorney, hire a buyer's agent (again, this is free) and listen to the appraiser. It never hurt any client of mine.

Not having a reserve fund.

All too often, buyers set a budget and then fall in love with a house that costs more. Then, they will convince themselves to borrow the difference, or drain every dime out of their savings to close on that house, or to accommodate a larger down payment. Not a smart move on either count.

My advice: Owning a home costs money, so does moving into a home, as does setting up utilities and being able to cover other unforeseen expenses. Stick to your budget, and know that you can make any house your home, with a little elbow grease, and a budget for improvements later on.

*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.

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