Not knowing what they can afford.

I always say that being prepared is the most important step in purchasing your next home.  Not knowing what you can afford means that you’re not prepared to begin your home search.  The best way to avoid this is to get pre-approved for a mortgage so you know exactly how much you can afford and what the monthly payments will actually look like.

Not understanding your representation.

Some people still believe that they’ll be able to ‘get a deal’ by using the listing agent and entering into dual representation.  Unless the Realtor is working as your buyer representative and you are their client, they are representing the seller and has the seller’s best interests in mind.  Having your own representation is extremely important, this is likely the biggest investment.  Read my post about How To Choose A Realtor.

Choosing the wrong mortgage.

Honestly, skip the bank.  If you have a long-standing relationship with your bank, sure, ask for their best rate and mortgage terms, but also shop around.  Using a mortgage broker will give you access to many more options than just speaking to your bank will.  A bad mortgage can end up costing you thousands in some circumstances.

Not finding problems with the home before closing.

It’s always recommended to have a professional inspector look at the home before buying it, otherwise you could be looking at huge potential repair costs.  Discuss with your agent if you should add an inspection clause into your offer or how to best take care of this depending on the current market conditions.

Not understanding credit.

You’ve been pre-approved for a mortgage, have an accepted offer on a great home and you’re feeling good.  Hold off on any other large purchases that will affect your credit or buying power, like financing a car.  This will impact your mortgage application and could possibly have your approval amount drop below the amount that you’ll need.  Get your mortgage professional to help you fully understand any implications that a large purchase may have before pulling the trigger on it.