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Looking to buy? Don't do these 7 things

As you choose the path that leads to the home of your dreams, you can take either a pleasant Sunday stroll in the park or a gut-wrenching tiptoe through a minefield.

As with most minefields, the worst thing you can do is to plow ahead without knowing what you're doing. We enlisted the aid of three experts for their advice on land mines to steer clear of when you're first getting ready to buy a home.

They are:

Here's their list of the seven most-important "don'ts" when you're considering buying a new house -- particularly if you're a first-time home buyer.

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Don't go it alone. It's wise to have your own buyer's agent and attorney. Don't rely on the seller's real estate agent, no matter how nice. Remember, that agent's loyalty is to the seller. Shop for an agent experienced in representing buyers, especially if you plan to look at homes for sale by the owner (FSBO). That owner may not know about certain restrictions and disclosure laws, is "conveniently" forgetting them, or just doesn't care about them. Buyers' agents often have such abbreviations on their business cards as ABR (Accredited Buyer Representative), CBR (Certified Buyer Representative), or CEBA (Certified Exclusive Buyer Agent). The secret is to retain the agent before the search starts. Shop also for an attorney, if you're going to use one -- and if you're a first-timer this is not a place to save a few hundred dollars. Get references from friends and neighbors and the real estate agent you've chosen. Meet with the attorney before you start house hunting. All too many buyers retain an attorney after they've already signed a contract. Bad move.

Don't go buying a lot of junk. Or even quasi-junk. Draining your savings or running up credit card debt to buying a new living room set, a big-screen TV or a new car could make a difference in your interest rate and whether you even qualify for a mortgage. Avoid spending money until after the closing is completed, whether by credit card or with cash. Keep debt down and as much money in your bank account as possible. The lender will check bank and credit card accounts.

Don't change jobs. Unless it can't be avoided through such things as drastic location changes, the experts say it's best not to change your employment picture until after closing. A worse move yet is to change from a salaried position to self-employment. Lending institutions like to see steady employment and generally insist that self-employers show two years of successful income.

Don't be too trusting. Just because the real estate agent seems caring and knowledgeable, don't forget, they work on commission. Don't put your life completely in someone else's hands. Only you can protect yourself. All too many home buyers place too much trust in others -- agents, the seller, title agencies, etc. Do your homework, become familiar with the entire home buying process and protect your own interests.

Don't mess up your credit. Don't go running around "fixing up your credit" without talking to a professional. You may think you're going to bump your score up a few notches by canceling a bunch of credit cards, for example. But canceling the wrong ones for the wrong reasons can seriously damage your credit score. Credit experts say it's important not to have too few or too many open credit accounts, and the best credit is old credit. Another possible pitfall is to transfer all your credit card balances to one card to get zero balances on the others. Your credit score actually will be higher in most cases if your balances are spread out across several cards.

Similarly, don't pay your bills -- at least not all of them. Paying credit cards down to below 50 percent of the your credit limit is generally helpful to boosting your score, but paying off all your debts is only wise if you still have enough cash when it's over to take care of your down payment, closing costs and prepays. In other words, don't deplete you entire savings to pay off your credit cards.

Don't think about lying. Lenders want to know how much cash you have to put into the house -- truthfully. If you're borrowing the money for a down payment and have to pay it back, it will have an effect on your ability to meet all your obligations. If it's a gift and doesn't have to be paid back, that's fine. But whatever you do, don't borrow it from your uncle and tell the mortgage banker it's yours -- the bank may ask you to document how long you've had it in that bank and where you got it from. A lie could backfire and ruin your whole deal.

Don't do any spring cleaning. Don't throw out bills, bank statements, or tax returns. A better idea than cleaning out is organizing all your important papers that may well be requested by a lender, such as W-2s, 1099 income statements, recent pay stubs and tax returns for the past couple of years if you're self employed. While you're at it, round up your prior title insurance policy, and any canceled checks, settlement statements or other proof that you paid collections or disputed accounts.

-- Updated: Dec. 7, 2004
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