THE most important thing to remember when making a large purchase is to always read the fine print.
When Christy Bieber, a full-time personal finance and legal writer, purchased a house years ago, she said she missed an important detail in her home inspection.
This tiny clause in her contract cost her over $10,000.
When you are about to purchase a home, many times buyers will get an inspection to make sure there are no structural issues, mold, or things that will potentially ruin your new investment.
When you hire the inspector, the contract should outline the work they are about to conduct and typically states that if the inspector misses any major damages, the financial burden falls on them.
For Christy, it was a bit different.
According to an article she wrote for the Motley Fool, her contract specified that if something was missed during the inspection, he was not responsible for any costs that she incurred because of it.
Essentially stating that if the inspector missed anything, the financial burden falls on her.
Well, the inspector missed a crack in the side and bottom of the pool.
After she purchased the home, they noticed that the crack was causing a large leak, which had to be fixed.
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Since it was not a small problem, they had to repair the entire pool totaling over $10,000.
Because she didn't read the fine print, she incurred the damages and had to pay that amount out of pocket.
Her takeaway: research the reputation of home inspectors and understand the details of any contract.
"It was a costly lesson to learn and a mistake I won't make again," Christy wrote.
Things to consider when purchasing a home
Purchasing a home is one of the largest investments you can make so it's important to make sure you are prepared.
Earlier this year, 81% of home buyers couldn't afford half of the homes for sale in their markets, economists from the National Association of Homebuilders reported.
As housing affordability continues to climb, potential homebuyers must be sure they have the proper funds before they purchase.
Another thing to consider is the right mortgage rate.
Christopher Thornberg, the founding partner of Beacon Economics, told The Sun that signing adjustable-rate mortgages (ARM) is one of the biggest mistakes he's currently seeing.
ARMs are home loans with an interest rate that adjusts over time based on the market.
They typically start lower than fixed-rate mortgages, so many think they are a great option, and they can be.
However, in this unpredictable housing market, this may not be the best decision.
"Stay away. Those rates are going nowhere but up," Mr Thornberg said.
Home sellers face surprise tax bills as house prices rise.
Plus, we explain your rights and options when it comes to removing your ex-partner from your mortgage without refinancing.