5 Mistakes Home Buyers Make

This story was originally published on AOL on April 28.

LOOKING FOR A new home? Well, you're in luck... sort of.

First, the good news: Home prices are falling, giving buyers more negotiating power. Now, the not-so-good news: Lining up financing has become much more difficult as droves of homeowners default on their existing mortgages. This isn't to say you won't be able to secure the home of your dreams, but you will need to be a bit more cautious and conservative with your purchase.

Here are five mistakes to avoid when looking for a home in today's real estate market.

1. Waiting to Sell Your Home

Given the current housing environment, it's more important than ever to sell your existing home before you commit to a new one. Thanks to a glut of properties on the market and tighter lending standards for potential buyers, it's going to take a lot longer to find a buyer than it would have a year ago. If you don't start showing your home until after you've signed a contract for a new place, you're taking on the added risk of carrying two mortgages for an extended period of time, warns Elaine Clayman, a real estate broker with Brown Harris Stevens.

Also, the only accurate way to know the real market value of your home — and, in turn, how much house you can afford — is to see how much someone else is willing to pay for it. "If for some reason you've overpriced the property you already own, you'll know that after the first two or three weeks it's on the market," says Peter Comitini, a real estate broker with the Corcoran Group. Once you have a realistic picture of the amount your home will fetch, you can adjust your budget for a new home accordingly, he says.

Read our story for tips on how to sell your home in a cooling market.

2. Ignoring Your Credit Score

Get a copy of your credit report as soon as you decide to move. Nearly 80% contain some type of error and 25% of those mistakes are serious enough to drag down your credit score, potentially disqualifying you for the most competitive interest rate on a mortgage, according to U.S. PIRG, the federation of state Public Interest Research Groups. Someone with a score of 620, for example, would pay at least one interest point higher than a borrower with a score of 720 (or may not even qualify for a loan at all), says Geoffrey Sheerar, a mortgage broker with Apple Mortgage, a New York City-based mortgage brokerage firm.

Reviewing your credit report also gives you a chance to discover and settle any delinquent accounts. "I've seen a client get a worse credit score than he should have over a $40 doctor bill that went to collection that the person didn't even know about," says Sheerar. Keep in mind, once you find a problem, it can take several weeks and a bit of legwork to have the black mark taken off of your credit report.

Click here for more tips on improving your credit score.