Last week we looked at some of the worst mistakes that homebuyers make, and talked about how to avoid them. This week, we will complete the list, and chart a path around these destructive, but common, home buying errors.

Here are some additional missteps to avoid:

* Failing to Shop and Compare.

Unless you have seen a reasonable number of comparable homes, you have no basis for comparison to help you make a reasonable offer. Thus, you need to see at least ten similar offerings in the market before you make your offer to purchase.

And once you decide you are truly interested in a particular home, I recommend that you ask your agent to prepare a "competitive market analysis," often called a CMA. This report will detail the homes which have sold most recently in the area you are considering, then outline the features and details of each. At a minimum, the CMA report should include age and condition of each home, the number of bedrooms and baths, the square footage, and the street address.

In addition, the CMA should list all similar properties which are "on the market" for sale, as well as those which are under contract awaiting settlement. By comparing the homes on this list to the home you are considering, you are able to get a much clearer picture of your home’s value in relation to that of the others.

* Buying the Most Expensive House in the Neighborhood.

The principle of regression states that the appreciation of the most expensive home in any neighborhood will likely be slowed by the less expensive homes surrounding it. This will make the "high-end" home in a modest neighborhood appear to be a bargain. But because communities tend to appreciate as neighborhoods and not as individual homes, the appreciation rate for the more expensive homes will be negatively affected.

This phenomenon would be most apparent in a neighborhood of very similar homes in which there was one extremely high-end property. Because the fancy house is completely out of the mainstream of the neighborhood, it will continually be "held back" in value due to its proximity to the conforming homes.

* Trying to Time the Market.

I have been actively watching the metro Atlanta real estate market for thirty years, and I have learned one thing: there is no way to know what is going to happen tomorrow.

Prior to the 1996 Olympic games, this market saw a run-up in housing prices. I was almost certain that prices would decline accordingly after the athletes and the media left town. To my surprise, just the opposite occurred. And I found myself wishing that I had bought properties at pre-Olympic prices.

My best advice for any prospective purchaser is this: Don’t buy real estate until you are sure you are ready. But once you are ready, don’t hesitate. Waiting for prices to go down or interest rates to become more attractive is a highly speculative and dangerous game.

* Over-Extending Yourself Financially.

This problem is hard to anticipate because the level of commitment you make to your real estate will vary with the individual.

A single buyer with no debts and strong income from a stable job might wisely spend a large percentage of his monthly income on housing, while a young family just starting out might need to limit their housing expense to a smaller portion of disposable income.

Many years ago, we were taught to say that you can afford a house valued at two and a half times your annual income. But with the wide variety of loan programs and the virtual disappearance of down payments, it is no longer possible to use such rules of thumb.

Instead, I recommend that buyers sit down with their tax preparers and ask for a tax projection based on any proposed purchase. Only in this way can the actual effect of a purchase be anticipated.

I also strongly recommend that buyers select long-term fixed rate loan programs as opposed to LIBOR or adjustable rate loans. The easiest way to get into financial trouble with your real estate is to choose a loan today that may have higher monthly payments tomorrow.

* Failing to Buy Owners Title Insurance.

When you buy any real estate, the closing attorney will check the title to make sure the seller is the actual owner, and to make sure there are no outstanding obligations or "liens" against the property. But there are some problems which cannot be discovered by a search at the courthouse.

A good example would be a deed which was forged in the chain of ownership at some point in the past. Because the deed appears authentic, your attorney would accept it as real. But if the signature was a fake, you might not find out for years to come.

Fortunately, you will have an opportunity to buy owners title insurance to protect yourself against future problems. It’s a one-time premium of about $2 per thousand dollars of purchase price, and it covers you and your heirs for as long as you own the property.