Part III: The 12 Biggest Mistakes Even Smart Peninsula Home Buyers Make…

By Raymond Stoklosa · December 19th, 2007

Mistake #7 — Declining a home warranty protection plan

Trying to save a few dollars by declining a home warranty can be a costly error in judgment. For a relatively small cost a home owner can obtain a substantial measure of protection against unexpected breakdowns and malfunctions.

Recommendation: Obtain a home warranty plan

Home Warranty Protection Plans are contractual guarantees by an insurance company to repair or replace certain systems and components within the first year of home ownership with the payment of a deductible. Home warranties insure you for the costs to repair or replace components like water heaters and furnaces. They offer an additional level of protection that may well prove to save you much more than their cost.

Mistake #8 — Putting on blinders

The image you have in your head of the perfect home is probably not realistic. Unrealistic expectations have as a consequence a huge opportunity loss.

Recommendation: Don’t let emotion cloud good judgment

Be realistic, flexible and open-minded. Consult with real estate professionals to test your expectations. Brainstorm how you might improve a house and create more value. A house in the right neighborhood, on the right street, at the right price can be made right over time. Don’t reject a house because it isn’t perfect- none are.

Mistake #9 — Not taking a long-term perspective

It’s almost always a mistake to buy a home based upon your short term needs while ignoring your long term needs. A careful needs and wants analysis with the guidance of a trained professional can save thousands of dollars.

Recommendation: See the big picture

Evaluate your purchase based upon a five to ten year holding period. Ask yourself where you want to be in five years- Will your family grow significantly in the future? Might an elderly parent come live with you? These are just a few of the questions left unanswered may be financially burdensome or emotionally draining.

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