When buying a home, make sure you do NOT make these mistakes. Doing so may cost you your dream home!
- Purchasing a home without a seasoned Buyer's Agent. Most buyers are not aware of the continuous moving parts to the home buying process. Many more are not familiar with all the roles the buyer's agents play during the process. The search for the perfect home is just the beginning. The hard part comes with negotiating the contract, completing the inspections, negotiating repairs, promptly following the timelines of the contract and guiding the process to closing. A good agent will help you negotiate the best price and terms, will coordinate all your inspections and successfully guide the transaction through to the closing.
- Not researching your Buyer's Agent experience, knowledge, and on-line presence. Many homebuyers do not take the time to research their agent's credentials and reputation. Just because someone has taken a 63-hour course and passed the state exam does not make them an expert in real estate. Check their experience in the industry and their education. Much of this vetting may be searched on-line. Those agents who have invested in their education with certifications and designations demonstrate their commitment to their real estate career. Google their reviews to see what past clients have posted about them. Trust your agent but verify!
- Make an offer on a home without being pre-approved. Making an offer without a preapproval can prove deadly to your home shopping experience. For one, most sellers will not accept an offer without a preapproval or proof of funds. If the property is HOT, you may lose the house to another buyer who is preapproved. Take the time to get preapproved. Show the Sellers you are serious about your purchase.
- Not completing all your home inspections. Nothing worse than spending a large amount of your hard-earned dollars on the purchase on your home and after the closing come to find something wrong with the house. Get your general, four-point, wind mitigation, termite inspections and the sewer line scoped before you move forward with your purchase. Inspections will uncover many items we would not otherwise view on a walkthrough of the property.
- Thinking there is only one perfect home out there. As the market grows fierce with buyer competition, many buyers become discouraged when they lose a home to another buyer. The fact is, that there are always new homes coming on the market and the overpriced homes always make price reductions in order to sell. Keep your chin up, that perfect home is right around the corner waiting for you.
- Not considering your long term needs. Many buyers fail to ask themselves where will I be 2, 5, or 10 years from now. Will I need to relocate or will I have a family? Take a moment to review your needs and discuss with your agent your current and possible future needs.
- Not examining insurance issues. Flood zones and roof conditions are major contingencies among other insurance matters. Knowing what flood insurance is going to cost you and the age of your roof are two issues you want to address early in your inspection period. You do not want your flood insurance to be the biggest part of your monthly house payment. Making sure you have at least 3 years left of life on the roof is also important to obtain proper home insurance. Your lender will require it! Many times a new roof may be negotiated into the sale of the home.
- Not buying a home warranty. A home warranty often proves to be a great investment for your home. Inspections will uncover 90% of matters affecting the home you will buy. However, the other 10% may go undetected until after you buy your home. An inspector will not take apart appliances and there are areas in a home they are not able to access to check for deferred maintenance. A good home warranty will cover most of these things and may save you thousands in repair costs. This can also be negotiated into the sale of the home.
- Not knowing your total costs involved. Having a solid idea what the loan will cost you, will best help you prepare to take on your new purchase. Borrowing the loan will cost you 1-6% of the price of the home you intend to purchase. Discuss your closing costs with your lender to prevent any sticker shock or nasty surprises at your closing.
- Not playing nice with the other party. Many buyers approach the negotiation table with a "Us vs.Them" approach. They fail to understand that the other party must also agree to the deal. Most negotiation gurus agree that in order to receive the best deal a more collaborative approach is essential. Finding out what is most important in a transaction to both parties is critical. Not all buyer or sellers are solely focused on price. Time frames and terms may play a critical factor for either party. Explore what the other side of the table wants and use it to negotiate.
Following the suggestions and recommendations of your seasoned buyer's agent or realtor will ensure you do not commit the above mistakes. Hope this blog helps you out with your home purchase.