Buying a Home? Two Pitfalls to Avoid

The Motley Fool is out in Seattle and today we stopped by Redfin to learn more about its unique position in the real estate industry. Vice President of Analytics and New Business Adam Wiener met with us to discuss how Redfin leverages technology to bring more value to the real estate transaction.

Buying a home can be overwhelming. Adam shares some mistakes first-time buyers tend to make when considering such a major purchase.

To view the full interview, click here.

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Austin Smith: If there were some common big mistakes that homebuyers make, what do you guys see as classic first-time home buyer mistakes?

Adam Wiener: I think that that falls into two categories.

I think one is the thing that we already talked about, which is just getting a handle on what the process is going to be like and that it may not be easy. It's emotional, it can be stressful. You really have to be ready for it.

I think the second big mistake that people make is they don't think as much about resale value as they should. They think about how a particular home may meet their needs right now, and as they're bidding on that home, they want to think about both what it's worth to them today but also what it would be worth to a future potential buyer when they go to resell.

The last thing that I think people don't think about as much as they should is what the operating costs of a home will be, as well as the maintenance expenses. Sometimes when you're making a newer home vs. an older home trade-off, you're probably going to pay more for the newer home, but you may not be factoring in what you're going to spend in utilities, in maintenance on an older home.

Austin: All those Home Depot runs add up.

Adam: That is true. That is definitely true, and that's if you're lucky enough to know how to be able to do the job yourself. If you have to hire a professional, it really can get pricey quickly.

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