The 12 Biggest House-Hunting Mistakes

It's probably the most expensive (and important) purchase you'll ever make. Here's how to make sure you don't end up with a money pit.

1. Ignoring Leaks

Leaky pipes and weak water pressure aren't just annoying -- they can signal a major plumbing problem (caused by old age or an amateur plumbing job). Look for S-traps (or s#%t traps, as we like to call them) under the sinks, which are a sign of an amateur plumbing job. Traps should form a “P" -- you know, for “professional." Also check under sinks, behind toilets and in the basement for leaks, and turn on the faucets to test the water pressure (sputtering water could indicate a leaky or clogged pipe). And beware of water damage, like blotches on walls, paint that's bubbling up and stains on basement floors. But don't just go on your eyes alone -- a good inspector will have moisture-detection tools that can determine whether a stain on the ceiling is from an old leak (that may have since been fixed) or a new one (that you'll have to fix). While some leaks are easy to repair, if the source is an old roof or rusty pipes that need replacing, you could end up having to fork over thousands.

2. Overlooking Electrical Issues

Most buyers don't even think to worry about a house's electrical system, but you should! Faulty wiring can spark a fire that turns your big investment into a big pile of ashes. Keep in mind that many older homes (over 50 years old) have severely outdated electrical systems that need to be completely rewired to the tune of several thousands of dollars. But that doesn't mean you're in the clear if your home is newer. Amateur wiring is just as dangerous as outdated wiring. Look out for exposed wires in the basement -- a dead giveaway of an amateur job.

3. Fixating on Appearance

Looks can be deceiving. As anyone who's ever seen pre-fame pics of Jennifer Aniston knows, a little yoga and a good haircut can go a long way. Translation: Don't let tacky decor, whether it's shag carpeting, plaid wallpaper or a bad paint job, blind you to a pad's potential. Cosmetic issues are fairly inexpensive to fix (plus, it's kind of fun to redecorate). Although you may have to live with puke-green carpets for a few months, in the end you'll typically save money (even after factoring in the remodeling costs) by buying a home that needs an aesthetic overhaul rather than paying more for a home whose seller has already done the work. Bottom line: Try to ignore the current decor and focus on the things that aren't as easy to spruce up -- the layout, size and location.

4. Prioritizing Extras

Certain amenities that you considered a must when renting are not nearly as important when you're buying. Can't live without a washer/dryer or dishwasher? Both are fairly easy and relatively inexpensive to install. Gotta have a gas stove, but the kitchen comes with an electric one? Installing a gas line to the kitchen isn't hard or pricey. There are, of course, some exceptions to the rule. For example, if you have to have central air, you're better off holding out for a home that comes with it -- unless you don't mind spending a bundle to install it.

5. Being LAM-Phobic

For most buyers, the mere mention of LAM -- lead, asbestos or mold -- sends them running. And with good reason: All three have been linked to serious health issues. But unless you're moving into a brand-new place, you're unlikely to find a home that's completely LAM-free. So weigh the pros and the cons of the situation. A small amount of mold and mildew can easily be bleached away, but a dank-smelling basement or more than 10 square feet of mold could require a professional remediation specialist. Significant amounts of mold can cause respiratory problems for anyone exposed, and mold can grow on almost anything. So any infested tile, insulation, ceilings, wallboards, carpet or wood may need to be replaced. As for lead paint and asbestos (usually found only in homes built before 1978), neither is necessarily immediately dangerous. Lead paint is typically fine unless the walls are actually peeling -- or if it exists on doorjambs or window frames, since the friction could create dust. (Tip: Ask the seller or realtor straight-up if lead paint exists -- they're required by law to disclose that info.) With asbestos, check out the home's insulation. If it's good, you're good. Worn or disintegrating? Pass on that pad, or ask the seller to deduct the cost of removal (about $1,000 to 3,000) from the selling price.

6. Not Checking the Foundation

If there's one huge thing you should pay attention to, it's the foundation. Because guess what? Even minor recession repairs could put you out $15,000 (or $100,000-plus for a major one). Some telltale signs of a faulty foundation: a wavy, uneven floor; significant cracks coming from the corners of walls, doors and windows; out-of-alignment doors and windows; a sinking roof and sloping floors.

7. Skipping the Inspection

This is one mistake that will come back to bite you, big time. Remember what we said about botched wiring, faulty foundations, leaky plumbing, LAMs and repair costs? An inspection will help you identify, and plan for, all of those red flags. Yes, an inspector will set you back a couple hundred bucks, but it could save you thousands in the long run. Don't be a tightwad when it comes to protecting an investment you'll be paying off for the next 20 to 30 years! You can't assume the seller will be up-front about (or even aware of) potential problems, even if it's someone you know (sad but true).

8. Living in the Moment

It might work for Buddhists, but house hunters need to think about the future. That includes the obvious (don't buy a one-bedroom condo if you plan to start a family in the next few years), as well as the not-so-obvious (predicting whether, in the next 10 years, developers will build a highway behind your house, or condos in the empty lot across the street). And believe it or not, you need to think about selling your home before you even buy it. You should look at your future abode as an investment and do everything you can to ensure that it will pay off when you sell it. Translation: You want to make sure the house will be worth more (or at least not less) than you paid for it when you're ready to sell. While some things are out of your control (like, say, a housing-market crash), there are things you can do now to make sure your big investment doesn't depreciate. Look for signs that the property's value and sellability will increase over time. For example, homes in good school districts are usually more desirable and, therefore, more valuable -- regardless of whether you plan to have kids. If you can't afford a pad in the “nice" area with the great school district, consider buying in an adjacent up-and-coming area, since the towns next to nice neighborhoods tend to become more attractive over time, and they often share that good school district. If you buy a house that could use a little work (but came at a great price), investing money over the years to renovate the old kitchen, replace the roof, etc., can increase your home's value significantly. But buying a house near empty land owned by developers? Risky. It's likely that they'll build on that land before you sell, and you'll have no control over what they build. In other words, you might lose your great view or quiet street and watch the property's value drop. Checking the zoning laws is a good place to start.

9. Letting Price Be a Deterrent

Just because a home seems way overpriced or falls just enough outside your price range doesn't necessarily mean you should just forget about it and walk away. If you're convinced it's the nest for you two, it can't hurt to make an offer. You may get lucky and spur the owners to reduce the price to a number that you can afford. But don't get your hopes up, especially if you're throwing out a lowball offer on a house that's clearly worth a lot more. But if it's not too far out of range, it's always worth a shot. If it works out, you'll be really psyched you did, right?

10. Not Seeing the Big Picture

Sure, it looks like a nice area, and you've read good things. But do your due diligence -- and by “due diligence," we don't mean a casual stroll around the block after the showing. Get in your car and test out the commute during rush hour (which will also give you plenty of time to check out other houses in the area). Pay attention to everyone else's property -- if it looks like most people are investing in their homes (taking care of the yard, paint, roof, etc.), it's a good indication that they like the town and see their homes as good investments. Do some people-watching too. Go ahead, be a little judgmental -- look at what people are wearing, check out what they're driving, observe their behavior -- and decide whether you think you'll mesh. Talk up the locals to get a feel for your would-be neighbors and neighborhood.

11. Falling for Smoke and Mirrors

Ever heard of putting lipstick on a pig? That's pretty much the same thing as “home staging" -- when savvy sellers strategically update the decor to make a space appear more valuable. If you aren't careful, you could fall for this trick and end up with a pig (or an empty piggy bank). Although minor upgrades and cosmetic fixes might cost the seller just $2,000, they could add an extra $40,000 to the house's price tag. Or they could blind you from seeing the $40,000 worth of repairs the place needs. Keep an eye out for quick fixes, like a kitchen with obviously brand spankin' new stainless-steel appliances and granite countertops -- they may be meant to distract you from the old and rusty plumbing. That being said, the things that you do fall for (like the pool table in the living room) are definitely worth getting stoked about -- just don't let them outweigh the red flags. So don't be afraid to flat out ask the sellers, and your inspector, lots of questions (do they have records of all major repairs done, or the name of the contractor who renovated the bathrooms?) in case they're trying to hide an unpleasant surprise.

12. Relying on the Seller's Agent

Most people underestimate how much paperwork, complications and pitfalls come with the home-buying process. An agent can guide you through the entire process (from securing a mortgage and finding the right place to negotiating and closing) and save you a lot of time and stress. But a seller's agent will most likely be looking out for the seller's best interests, not yours. Don't you want the person giving you real estate advice to have your best interests in mind? To find a good buyer's agent, consult the National Association of Exclusive Buyer Agents (NAEBA.org) or ask a friend for a rec.

Nestpert: Michael Wolf, GRI, real estate professional and author of The First Time Homebuyer Book