The Top Ten Mistakes Buyers Make
10.) Starting the search before getting pre-approved for a loan.
We’ve all been there – just can’t resist coming out of the block a second before the starting gun. But to save yourself some heartache when you find out you can’t get a loan on the $300,000 house you’d fallen in love with, go to your lender and find out what you can actually afford. Don’t just get pre-qualified – get pre-approved for a loan. And then it’s ready…set…go! And no nasty surprises.
9.) Not working a local lender.
While we’re discussing your loan, may we suggest you use a local lender? A local lender knows the community, knows the associations, neighborhoods, and developments and has 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 contributing to 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 don’t borrow more than you need. Spend what you can afford, taking into consideration monthly expenses, possible repairs and your own future. Don’t get in over your head.
7.) Failing to consider re-sale value.
Maybe you’re buying your last home, and this is a moot point. But life is full of surprises, and it’s a good idea to consider the possibility of someday reselling your home. You may outgrow this one, you may change jobs and have to relocate, you may want to be closer to a school or the nightlife. So as you search for your dream house, look for qualities – neighborhood, construction, floor plan, storage – that will remain salable 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.
And speaking of trouble down the road – never skip the inspection. Yes, it will cost some money – but it’s money you can’t afford NOT to spend. Most buyers aren’t qualified to test for or detect every potential or existing problem. You may wish to accompany the inspector to get an explanation of issues – and 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 seller’s 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 let our hair down. 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 the perfect time.