5 Things Not to Do When You Buy a Home (By a Couple Who Did Them All)

Buying our first home in Alaska in 2009 was the biggest mistake my husband Zach and I ever made. Today, we’re in the midst of actually trying to hand the house back to the bank. As a result, Zach’s credit score will likely drop at least 100 points, and we’ll lose out on at least $10,000 in equity. But keeping the house could have cost us even more.

Our situation wasn’t always this dire. Buying our home was one of the happiest days of our lives, a reward after Zach returned from an 11-month overseas deployment with the Army.

But we ended up spending tens of thousands on unexpected repairs. After we moved to Colorado a couple years ago so Zach could attend school, we weren’t able to sell the home and got hit with even more repair bills.

It’s a bad situation—but it’s one we could have prevented. We made serious, and completely avoidable, mistakes along the way. Here are five of the worst.

Mistake #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. Instead, 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 reputation.

Mistake #2: 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,” a.k.a. the scourge of all Northern homeowners. Permafrost 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.

I’d actually rented homes built on permafrost before and thought this home could withstand any problems. But I should have had that hunch confirmed by an inspector, which leads me to…

Mistake #3: Not Getting a Good Home Inspection

We relied on our agent to guide us through the homebuying process because we didn’t have a clue what we were doing. So 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 pros.

Rather than performing a detailed, documented home inspection, he spent 10 minutes metaphorically kicking the tires of our home. We even pointed out that several of the septic tank pipes seemed cockeyed coming out of the ground, but he told us not to worry. We ignored our gut feeling, and purchased the home.

Mistake #4: Not Saving Up For A Down Payment

We had a nice $14,000 nest egg when Zach returned home from his deployment. But rather than putting it toward a down payment, we went on a shopping spree and bought a truckload of new furniture. We took advantage of a zero-down VA loan instead.

This came back to haunt us when we tried to sell. Since we had very little equity, we were forced to maintain a high asking price if we wanted to cover closing fees and break even. If we had more wiggle room—even $10,000—we might have had better luck selling it.

Mistake #5: Not Saving Up for Repairs

Despite plenty of warning signs, we never prioritized saving for repairs. After all, the home was only a few years old. We thought we were safe.

But 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.

All told, we’ve had to come up with nearly $30,000 over the past two years for repairs. It’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 loan.

Finally, earlier this year—two years after putting it up for sale—we received our first offer. But a (proper) home inspection revealed that the entire septic system was failing, despite years of repairs. The buyer rescinded, and we were unable to continue renting the home to cover our monthly $1,236 mortgage.

We 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 foreclosure. Through that process, we’ll hand the home over to the bank and forfeit the money we’ve paid for it, but give up the mortgage.

Learning Our Lesson

To say it’s been a long and difficult road would be a major understatement. But believe it or not, we haven’t sworn off homeownership. We probably won’t be able to buy a home for at least seven years, after the deed-in-lieu drops off Zach’s credit report.

But in the meantime, we’re investing $100 a month, with plans to increase that as we can, for a down payment. And we won’t pull the trigger this time to buy a home until we have at least a 20 percent down payment—and a thorough inspection.

This post originally appeared on Grow.

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