Buying and selling real estate is something most people do only infrequently. Lack of experience can lead to unfortunate, and costly, mistakes. This is my second article to help buyers avoid the pitfalls of the process.

DON'T assume you can “take your time” making an offer just because a property has been on the market for awhile.

DO be aware that time works against you. If you really like the home and can qualify to purchase it, make an offer. I can’t tell you how many times I have seen people hesitate and agonize about writing a contract, only to have someone else beat them to it. Why allow the opportunity for another buyer to make it a bidding war?

This advice assumes you have seen enough homes to have a good sense of prices and neighborhoods. For most people, it is tough to decide quickly if they have just started looking.

DON'T buy a house over a location.

DO place the highest priority on location, which impacts both value and quality of living. In most cases, it is better to buy a smaller home in a more desirable neighborhood, than a larger one in a less appealing area. This is an undisputed real estate axiom.

DON'T spend your valuable time calling on newspaper ads and “For Sale” signs once you have an agent.

DO call your agent. He or she should know or be able to easily identify any property that is attractive to you. Buyers do this because they don’t want to miss anything that might be right for them. Agents, however, have access to a number of tools, principally the Multiple Listing Service (MLS), which allows them to do a comprehensive search and to track new listings.

The best way to get an idea of the market and prices in different places is to have your agent show you property and for you to look at open houses. Your Realtor can direct you to the appropriate open houses.

DON'T work with out-of-area agents.

DO look for someone who specializes in the territory of your interests. What you need is a Realtor with in-depth knowledge, not a “general idea” of neighborhoods, prices, schools, earthquake fault zones, etc. Don’t shortchange yourself. Work with an expert.

DON'T forget that we live in earthquake country.

DO add value to a home that has had earthquake retrofitting. If it has not, plan to have it done as soon as you can after closing escrow. The question about the next big earthquake in this area is not if, but when. By living here, we knowingly take that risk. Retrofitting  is not an option; it is a necessity.

DON'T disregard what your nose and eyes tell you when you enter a house. A dank, damp, musty smell is hard to avoid.

DO pay attention to mildew, mold, standing water and other signs of  drainage inadequacy. This is one of the least understood, yet most destructive of all physical problems with a house. A good agent and inspector will help you verify the signs. Obviously, they are more easily detected during the rainy season.

Correcting drainage can be very expensive. If this is an issue, make sure the seller either corrects it or compensates you in the price.

DON'T sign a purchase contract without first reading and understanding it. Once you sign, you will be obligated to the contract whether you comprehend it or not

DO make sure your agent carefully and thoroughly reviews the contract with you. Not all agents are proficient at contracts. Choose one who will explain the nuances, which clauses to add and what to delete in your best interests.

DON'T sign a blank check for anything. This means you should not agree in the purchase contract to pay for something unless there is a specific dollar cap.

DO limit your liability in the contract. For example, if you agree to take the roof, gutters and downspouts “As Is,” are you talking about $3000 of work or $15,000? Thinking about this after you agree is too late.

DON'T negotiate with the seller directly either before or during a transaction.

DO handle everything through your agent. All agreements in a real estate sale must be in writing. Negotiating without your agent can create misunderstandings. Your agent’s job is to protect you. He or she cannot do that if you are dealing with the seller without his or her input.

DON'T minimize the importance of permits from the city or county for work done to the property.

DO ask your home inspector to assess whether or not you need to be concerned about the “un-permitted” work. The more extensive and expensive the job, the more apprehensive you should be. There could be health and/or safety risks as well as potential problems with lenders and local authorities.

DON'T accept responsibility for active powder post beetles on a pest control report without understanding what beetles are and how damaging they can be.

DO personally call the pest control operator. Ask him to explain the worst-case scenario related to the beetle infestation. From my personal experience, the worst case is that the beetles could invade large sections of the home. Since they fly, it is impossible to know all the areas where they have made holes in the wood and laid their eggs.

Think twice about accepting localized treatments for beetles. Only tenting the entire structure can ensure the demise of these destructive bugs.

DON'T blindly agree to take responsibility for “Section 2” items in a pest control report.

DO speak with the pest control operator about what seemingly innocuous parts of the report could end up being costly later. Work with an agent who understands the ins and outs of structural pest control inspections.

DON'T assume a room is a  bedroom or sleeping room just because it is advertised that way.

DO have your agent explain the requirements for a room to be a bedroom. A common, and potentially disastrous, mistake made by real estate agents is misidentifying a room as a bedroom. Do not automatically believe the number of bedrooms indicated on flyers, ads, or even the MLS.

I am not talking technicalities, or splitting hairs on definitions. This is about health, safety and value. If your loved one was trapped in a fire and couldn’t get out of the room because it didn’t have at least two exits, one of the defining features of a bedroom would become apparent.

DON'T be misled by the words “in-law” or “potential in-law.” This is another category often mishandled by sellers and their real estate agents.

DO know that, in most cases, there is no such thing as a legal “in-law.” What this really implies is “an illegal unit, often rented” as opposed to a legal duplex. In order to be both legal and “conforming,” a unit must meet numerous requirements, including parking.

Many of these “apartments” have people sleeping in rooms that definitely do not qualify as bedrooms. This could entail liability exposure for the owner.

Lenders do not usually consider in-laws as income producing spaces. Don’t count on rental income from an in-law to help pay your mortgage; that money can disappear quickly if neighbors complain to the authorities. Check with the local building department for their regulations on in-laws.

Final Thoughts

For many people, buying a home is a complicated proposition. Most realize they need assistance and protection. The right Realtor can provide both.

Related Articles:Buyer's Do's & Don'ts, Part 1; Seller's Do's & Don'ts, Part 1 and Part 2; How to Interview Agents, Part 1 and Part 2