Home-sale mistakes that cost you money

There's plenty you can do to affect how much money you make on a home sale or spend on a purchase, according to Consumer Reports' recent survey of real estate pros.

In a typical transaction, the money you stand to gain from making smart moves -- or lose from making poor ones--can be substantial, from 11 percent to 20 percent of a home's value, according to the survey. Consumer Reports' offers the following advice.

Homebuying blunders

• Rushing into a deal. One of the more costly mistakes homebuyers make is agreeing to too high a price on a home. A related mistake is overestimating one's knowledge of the real estate market. Take your time, go see lots of homes and get a good idea of the local price scale.

• Biting off more than you can chew. Don't underestimate the costs of homeownership. It's not enough to calculate the monthly mortgage. You also need to factor in your closing costs and all of the additional fees. Many of the fees are negotiable, such as the home inspector's fee and your attorney's fee. And find out what the current homeowner pays for utilities, taxes and other monthly costs.

• Failing to upgrade your credit score. To get the most favorable rate on a loan, you have to have a strong credit profile, and that means a credit score of at least 740, says Greg Mcbride, chief financial analyst for Bankrate.com. Don't wait until the last minute to scrutinize your credit reports and make any necessary changes to improve your profile.

• Not shopping around for a mortgage. When shopping for that mortgage, sticking with your regular bank could be costly. Approach several lenders, including banks and credit unions. You can search for national deals on Bankrate.com.

• Skipping the home inspection. Be present during the inspection to learn about any costly repairs that might be needed and to get basic info on the home, such as where the electrical panel is and where you shut off the water. A home inspector can also point out repairs that will need to be done in the next few years.

Seller slipups

• Overpricing your home. This is the most costly mistake, cited by 43 percent of surveyed agents. "If you price it too high, it will just sit on the market, agents will stop showing it and buyers will assume there's something wrong with it," says Jeanette Cook, a real estate agent in Burlingame Hills, California, a suburb of San Francisco. "You may have to drop the price far below what you think it's worth just to entice people to look at it again."

• Overpaying the commission. Unless your agent is a close relative or friend, he or she will charge a commission, or percentage of the sale price, and may even lead you to believe that the fee is inflexible. But, in fact, 63 percent of the real estate agents in Consumer Reports' survey admitted that they negotiate their fees at least half of the time.

• Hiring the first agent you meet. Selling a home is one of the biggest financial transactions most people make, so you need to have someone you trust. Ask friends and family for recommendations and meet with at least three candidates. Check references from at least three recent clients.

• Neglecting to do a Google search for your address. Make sure nothing negative comes up, such as an old lawsuit or public records that have inaccurate information about your home's number of bedrooms, say. Also check your home's street view on Google Maps.

• Putting your home on the market before it's ready. Don't put the "for sale" sign on your lawn until it's show time. With 92 percent of homebuyers using the Internet as part of their search, according to the National Association of Realtors, photos are key.