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Don’t make the mistakes this couple made buying a home


Buying our first home in Alaska in 2009 was the biggest mistake my husband Zach ... Mistake No. 1: Not shopping around for a real-estate agent In our excitement to become homeowners, it didn’t cross our mind to shop around for a real-estate agent.


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Published: Feb 8, 2018 12:56 p.mET Share .st0{fill:#FFFFFF;} .st1{fill:#E12828;} .st2{fill:#FAEAEA;enable-background:new ;} .st3{fill:#FAD4D4;enable-background:new ;} It seemed like a good idea at the time window.videoDomain = 'https://video-api.wsj.com'; Getty Images An inspector checks for leaks in a homeA detailed, documented home inspection can save you thousands of dollars and plenty of grief. By LindsayVanSomeren Buying our first home in Alaska in 2009 was the biggest mistake my husband Zach and I ever madeToday, we’re in the midst of actually trying to hand the house back to the bankAs a result, Zach’s credit score will likely drop at least 100 points, and we’ll lose out on at least $10,000 in equityBut keeping the house could have cost us even more Our situation wasn’t always this direBuying our home was one of the happiest days of our lives, a reward after Zach returned from an 11-month overseas deployment with the ArmyBut we ended up spending tens of thousands on unexpected repairsAfter we moved to Colorado a couple of years ago so Zach could attend school, we weren’t able to sell the home and got hit with even more repair billsIt’s a bad situation—but it’s one we could have preventedWe made serious, and completely avoidable, mistakes along the wayHere are five of the worstMistake No1: Not shopping around for a real-estate agent In our excitement to become homeowners, it didn’t cross our mind to shop around for a real-estate agentInstead, we hired the first one we saw an ad for in the newspaper(We should have looked for one who’d lived and worked in the community for a long time, and had great recommendations.) Later, we’d learn through the grapevine that our agent was known for less-than-honest dealings with clients—something we experienced ourselves, but could have easily avoided had we asked around about his reputationMistake No2: Not waiting until we found the right home While we found a relatively modest home—a two-bed, one-bath for $170,000—our eagerness led us to ignore one glaring flaw: It was built on permanently-frozen ground known as “permafrost,” aka the scourge of all Northern homeownersPermafrost wreaks havoc when it thaws after homes are built on it, sometimes causing buried septic systems and water tanks to sink and collapse—which is exactly what happened when Alaska experienced unseasonably warm temperatures after we moved to Colorado Don’t miss: Home buyer’s remorse: why you get it and how to get past it I’d actually rented homes built on permafrost before and thought this home could withstand any problemsBut I should have had that hunch confirmed by an inspector, which leads me to… Mistake No3: Not getting a good home inspection We relied on our agent to guide us through the home buying process because we didn’t have a clue what we were doingSo when he suggested his buddy for a cheap inspection, we took him up on the offer rather than doing our own research or asking other industry prosRather than performing a detailed, documented home inspection, he spent 10 minutes metaphorically kicking the tires of our homeWe even pointed out that several of the septic tank pipes seemed cockeyed coming out of the ground, but he told us not to worryWe ignored our gut feeling, and purchased the homeMistake No4: Not saving up for a down payment We had a nice $14,000 nest egg when Zach returned home from his deploymentBut rather than putting it toward a down payment, we went on a shopping spree and bought a truckload of new furnitureWe took advantage of a zero-down VA loan insteadThis came back to haunt us when we tried to sellSince we had very little equity, we were forced to maintain a high asking price if we wanted to cover closing fees and break evenIf we had more wiggle room—even $10,000—we might have had better luck selling itMistake No5: Not saving up for repairs Despite plenty of warning signs, we never prioritized saving for repairsAfter all, the home was only a few years oldWe thought we were safeBut within two years, bills were piling up—a $5,000 septic tank replacement here, a $350 frozen water line there—and they got worse after we moved Also read: What to expect from the real estate market in 2018 All told, we’ve had to come up with nearly $30,000 over the past two years for repairsIt’s been a huge burden for me, as I’ve also struggled to support my husband who’s still in school, on my less-than-entry-level salary(Though, fortunately, we both got side gigs now that supplement our income by about $2,500 a month.) It’s drained our savings, and we’ve taken out a $12,000 personal loanFinally, earlier this year—two years after putting it up for sale—we received our first offerBut a (proper) home inspection revealed that the entire septic system was failing, despite years of repairsThe buyer rescinded, and we were unable to continue renting the home to cover our monthly $1,236 mortgageWe were stuck: We couldn’t afford the $35,000 repair bill, and we could no longer afford the mortgage in addition to our rent—which is why we’re now pursuing the deed in lieu of foreclosureThrough that process, we’ll hand the home over to the bank and forfeit the money we’ve paid for it, but give up the mortgageLearning our lesson To say it’s been a long and difficult road would be a major understatementBut believe it or not, we haven’t sworn off homeownershipWe probably won’t be able to buy a home for at least seven years, after the deed-in-lieu drops off Zach’s credit reportBut meanwhile, we’re investing $100 a month, with plans to increase that as we can, for a down paymentAnd we won’t pull the trigger this time until we have at least a 20% down payment—and a thorough inspectionRead the original article on Grow More from Grow: Retire at 30? 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