The summer real estate market got off on the wrong foot with the latest data from the U.S. Department of Commerce showing that housing starts and building permits fell to a nine-month low last month.
As housing supply diminishes, buyers are forced to exercise more due diligence in selecting a home, which “Flip or Flop” television show star Tarek El Moussa knows all too well–but unfortunately, not at the time when he bought his first home.
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El Moussa revealed to Realtor.com that during the nascent stages of his real estate investing career at age 21, he was eyeing a California home that would serve as the ideal bachelor pad. Unfortunately, as his emotions welled up in excitement, his common sense began to diminish.
The asking price of the home was $800,000 and with a financial sleight of hand by a mortgage loan officer, El Moussa was approved, but ended up penniless in a 1,400 square-foot home adorned with the latest in minimalist furnishings–as in no furniture whatsoever.
“Although I laugh looking back at it now, the experience taught me an important lesson: Buying a home is exciting,” El Moussa told Realtor.com. “So exciting, in fact, that it’s all too easy to get swept up in your emotions and make some mistakes.”
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El Moussa cited seven mistakes rookie home-buyers make:
- Going house shopping before mortgage shopping
- Buying a house beyond your budget
- Gushing about how much you love a home
- Bypassing a home inspection because the house looks perfect
- Assuming new construction is in great shape
- Forgetting to ask about HOA/condo fees and assessments
- Buying just because you’ve had it with house hunting
For real estate trends affecting ETFs, click here.