Top 10 Mistakes to Avoid When Buying
Buying a home is one of the most exciting things you can
do, but dont let the excitement overwhelm your common
sense. If youre not an experienced home buyer then
its easy to fall victim to these Top 10 Mistakes
that Homebuyers Make.
1. Buying a home before you are ready for home ownership
Lots of people get pressured into buying a home by well
meaning friends and family who tell them what a waste
of money renting is. While renting does not build equity,
it comes with a whole lot less responsibility and expense
than home ownership does. Take your time and dont
buy until you are ready to buy.
2. Falling in love with the house
This happens when we are overwhelmed by the emotional
aspects of buying and spurred on by the subtle pressures
of the seller and their agent. Just like we tend to overlook
the faults of people we love, a buyer who falls in love
with a house might end up overlooking flaws that will
haunt them later.
Buyers often find out things after the sale that might
have stopped them from buying if they knew in advance.
Although Agents and sellers are obligated to disclose
certain defects or circumstances about a property, those
requirements may not cover everything that youd
want to know. After reading the disclosure list, if any,
ask specific questions about anything else thats
important to you. For example, if the idea of living at
a former crime scenes
turns you off, ask if any major crimes or incidents occurred
at the home.
3. Misunderstanding the loyalties of the Real Estate
In most areas the Real Estate Agent represents the seller
and not the buyer. That means that you cant expect
the agent to keep anything you say from the seller. If
youre offering 200k, but youll go to 210k
if you have to, keep that secret to yourself. If the agent
knows your top limit then he or she is actually obligated
to tell the seller if thats who they represent.
4. Overpaying because of pressure or deceitful sales
Buyer soften pay more than they have to because they are
warned that there are other offers being considered
so they need to make their highest offer first. That may
or may not be true, but never make an offer thats
higher than you would make without any outside pressure.
An offer is legally binding if its accepted and
youll have to live with that buying price for a
long time to come.
Another reason buyers overpay is because they dont
realize that anything can be negotiated including closing
costs, inspection fees and the price of repairs. Real
magic happens when a motivated seller and an earnest buyer
sit down to conduct business.
5. Failing to get mortgage pre-approval before shopping
Buyers who start the shopping process without being pre-approved
for a mortgage have a harder time getting their offers
accepted and they set themselves up for disappointment
if their dream home turns out to be more than they can
You also run the risk of not getting the best mortgage
deal possible if you are forced to rush into accepting
the first offer that you get.
6. Failure to get it all in writing
Buyers who accept verbal agreements or promises made on
a handshake often find that no one remembers that conversation
at closing time. If its important to you then get
it in writing.
7. Not finding defects before you buy
While new homes come with specific warranties and guarantees,
youre usually on your own when youre not buying
new. Dont rely on the word of the seller or the
agent when it comes to ascertaining the physical condition
of the home. Protect yourself by writing Subject
to satisfactory property inspection results on any
offer you make and then hire a professional property inspection
Another word of advice is to find your own property inspector
and do not reply on one that is recommended by the seller
or agent. Make sure you are there when the inspector arrives
and dont let the agent or seller have any conversations
with the inspector outside of your presence.
8. Losing control of the transaction
This is going to be your home and buying it is your decision.
When you let agents, friends or family persuade you for
or against a particular piece of property then you are
losing control of the transaction. Just stop, relax, take
a deep breath and remember who is in control. Its
9. Failure to do your own due diligence
The chances are your visit to the home of your dreams
occurred during the best time of day, but youll
be living in that home 24/7. Visit the neighborhood during
rush hour, late at night and at other random times. Can
you deal with getting in and out of your neighborhood
during your commuting times? Does the sound of the nearby
NASCAR track drown out backyard conversation on Sunday
Also make sure that the schools and community amenities
suit your needs and lifestyles. Check property taxes and
utility bills to make sure that you can afford the cost
of living in your chosen community. If you are subject
to deed restrictions or homeowner/condo rules then make
sure you can live with them. Even automobile insurance
rates are affected by zip code so the more you know about
a community the better off you are.
10. Buying more house than you can afford
Just because the lender approved you for a certain amount
doesnt mean that you can handle the payments. This
is especially true if you have a life-changing event on
the horizon such as having a baby or changing jobs. Be
especially wary of your payment thresholds if you have
an Adjustable Rate Mortgage because you can bet those
payments will be going up a lot sooner that you want them
to. Dont forget to factor condo fees or homeowner
association dues into your monthly expenses.
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