Common Mistakes Buyers Make
A common mistake we've all made—jumping the gun out of excitement. In order to save yourself some disappointment when the loan for that $300,000 home you've fallen in love with doesn't work out, do your homework and contact your lender to learn what you can actually afford. Get pre-qualified and pre-approved. It will save you headaches and heartache and avoid any potential surprises.
9.) Not working with a local lender.
On the discussion of loans, we always suggest you use a local lender. Local lenders are a part of the community, and know the associations, neighborhoods, and developments, and have a vested interest in the community. He or she is also likely to have relationships with your agent, local appraisers, inspectors, and title companies—all ensuring a smooth transaction.
8.) Buying more house than you can afford.
Still discussing loans, your lender may happily inform you that she will give you a huge loan. But many buyers get excited and borrow more than they need. Spend only what you can afford, while carefully considering monthly expenses, potential home repairs, and your own future. Don’t get in over your head.
7.) Failing to consider resale value.
Perhaps you’re buying your forever home, and this is a moot point. But life is not set in stone, and you would be wise to consider the possibility of someday reselling your home. You may outgrow this one, you may change jobs and have to relocate, or you may want to be closer to a school or the nightlife. So as you search for your dream house, consider qualities–such as neighborhood, construction, floor plan, storage–that will remain sought after for buyers the next time around.
6.) Failing to realize all real estate is local.
Many buyers come to their Realtor believing they have all the information they need on real estate investment. While I don’t want to diminish the understanding of an informed buyer, please do listen to your Realtor’s opinions and advice when it comes to making an offer. He or she has an intimate, educated knowledge of the local market (which is often much different than the national or even state market), and also has access to pertinent past sales and comparable homes currently listed.
5.) Purchasing by emotion.
I like an old farmhouse as well as anyone, for instance, but when a buyer falls in love with the original woodwork and fails to notice the original plumbing, furnace, roof, and newspaper insulation, he is asking for trouble (and expense!) down the road. Don’t let love blind you to a property’s shortcomings – we all want to avoid buyer’s remorse!
4.) Skipping the inspection.
Speaking of trouble down the road – do not skip the home inspection. Yes, it will cost some money – but it’s money you can’t afford NOT to spend. The majority of home buyers aren’t qualified to test for or detect every potential or existing problem. You might even want to accompany the inspector to receive a full explanation of the issues to determine the severity of said issues. When you’re writing an offer, make it contingent upon the inspection.
3.) Not reviewing the contract carefully.
When you’re ready to make an offer on a property, make sure you read the contract language and talk to your Realtor about anything you don’t understand. You don’t want a surprise at the closing table – and neither does your Realtor. You should know what your obligations are, and also what the sellers are to you.
2.) No contingencies in your offer.
A contingency in an offer to purchase is an escape route should you need one. We hope you don’t, and you hope you don’t, but there are occasions which may necessitate one. Talk to your agent about making your offer contingent upon the inspection and your ability to get financing.
1.) Waiting until the market changes.
Buying a home has long been part of the American dream. We want a home to raise our families and be able to build, decorate or landscape however we want. We want to build not just a house, but our futures, building equity and memories under our own roofs. No one can see into the future, so if you are financially and emotionally ready to buy a home, now is a perfect time.