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How to Avoid Pitfalls when Building or Buying a Home
HOW TO 
Tags: Buying a Home, Purchasing a Home, Building a Home
Buying a home is a complicated process fraught with difficulties. If you want to make sure your home buying or building process is a success, there are some things you can do.
| 1. | Make sure your architect and builder have worked together before and get along well. Whichever one you hire first, ask him to recommend the other. Otherwise all of their little conflicts will cost you plenty. |
| 2. | Try to choose modest changes on a plan that has already been built. Re-inventing the wheel costs plenty. |
| 3. | Pay the builder as the work is completed. If possible, pay the subs yourself. Otherwise you may fully pay the general contractor and have several liens on your home from unpaid subs. If he pays them directly, get proof of payment. |
| 4. | Realtors maximize income by shoehorning you into the biggest loan you can qualify for. This will make you "house poor", able to make your payments when all is well, but unable to afford anything else. |
| 5. | Avoid traditional realtors and their 6% commission and go with a discount broker online. On some sites you can search for your home using satelite images and get more information than the realtor has. |
| 6. | Adjustable rate mortgages are very dangerous for consumers although banks love them because they make so much money and put all the risk on the buyer. |
| 7. | Try to borrow for 15 or 20 years to greatly reduce your interest paid. |
| 8. | Don't assume that buying is better than renting. If you will move in less than 5 years or homes are not significantly appreciating, your home is likely an expense and not an investment at all. |
| 9. | Most buyers seriously under estimate the costs of taxes, insurance and especially repair. Once bad roof, water heater etc. can be very difficult financially. |
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