Buyer Mistakes To Avoid
So, you’re ready to take the plunge and buy a new home. Maybe it’s your first brush with the American dream. Or perhaps you’re moving up in the world.
No matter. The same pitfalls await whether you’re shopping for a starter home or a lavish mansion. And in the current market, buyers are prone to make mistakes. They think, If I don’t buy now I’ll never be able to do it…You’ve got to do your homework to avoid mistakes and we’re here to help.
You Didn’t Set a Budget
Buy a home that’s way out of your price range and you could well derail your ability to fund other important items such as retirement savings, your kids’ education — not to mention an entertainment budget.
Mortgage brokers will tell you how much you can borrow. But that amount may not be what you can afford to pay. You have to look at all of your monthly expenditures.
You Picked the Wrong Mortgage
These days, many homebuyers are rushing to secure a mortgage as fast as possible without fully exploring their options. That’s because sellers often only consider bids from individuals who have been pre-approved for a loan. A word of advice? Pick your financing package with care.
You Picked the Wrong Community
Some places are just flat-out expensive, and you’ll probably have to search for a location that’s affordable. That doesn’t mean you should choose the cheapest locale.
If you don’t like the location you’ll be unhappy. What’s more, you’ll probably have a hard time selling your property if the community isn’t good.
…If You Have Children
Don’t neglect the schools. Gather such data as test scores, statistics on the percentage of kids who graduate and go to college, the student/teacher ratio and so on. Talk to parents and students to get the inside scoop.
You Didn’t Know What Homes Really Cost
The best way to determine if you’re getting a fair deal is by comparing the cost of the home you’re interested in with similar homes in an area. You can do this easily by having your Realtor at Beaulieu Real Estate provide you with a CMA (Comparable Market Analysis).
You Used a Bad Real Estate Agent
Don’t make buying a home more difficult by choosing the wrong agent. You want a buyer’s agent who works for you and understands your needs and financial limitations. Make sure the agent has significant experience in the area where you want to live.
You never went back to check on the neighborhood
If you’re like most homebuyers, you probably spend many weekends looking for a new dwelling. But what happens to the neighborhood on weekdays or after dark? Is the house that’s “convenient to town” sitting on a main thoroughfare that fills up with cars come commute time?
You Forgot To Consider Resale
It’s easy when you’re house hunting to forget what it’s going to be like to sell your home down the road. But as you tour homes, put yourself in the perspective of the sellers. You may be drawn to a home that has quirky features or just one, tiny bathroom, but others may not be as enthusiastic. When you buy, think about the day it comes time to sell.
You Bought the Most Expensive Home on the Block
It’s wonderful when you find your dream house, but if it’s the most expensive home on the block you could have a problem. Quite simply, your neighbors’ lower home values will dampen yours. Buyers should steer clear of homes that cost 50 percent more than neighboring dwellings.
You Didn’t Hire A Home Inspector
Bottom line: you should never buy a home without having it inspected. After all, you don’t want to learn that you’ve bought a house that’s filled with termites or has a frazzled electrical system. If you’re building a new home, an inspection can ensure that all the work has been finished properly.
You Forgot About Closing Costs
Think it’s bad to pay tax when you eat out? Wait until you’re paying closing costs, which can run 2 to 5 percent of the home’s purchase price, according to Tyson. A mortgage lender should provide you with a specific estimate of what costs will be.
Putting Up “Non-Refundable” Earnest Money
This is like giving the Sellers a check and saying, “Here, you keep this. Even if we don’t buy your home, you can keep our money”. That’s just plain stupid. If your Agent recommends it, find another agent because they don’t have your best interest at stake.
Waiting for Prices to Come Down
As smart as you think you are, you cannot sharpshoot the real estate market. You never know when the best time is. Prices ebb and flow, and occasionally, like right now, they go down a lot. Nobody knows when the tide will turn, and based on historic data, it always does.
Not Asking to See the Last Six Months of Electric and Water Bills
You should check to see if they match what you were told, so you’ll have a realistic idea of what you’ll be spending. If the heating system in the house is old, it may bleed money, which will mean one of two things: High bills or the high costs of replacing it. If you are already stretched on the mortgage, this could land you in real trouble.
Falling in Love With the Décor
Finding the right décor is the easiest improvement you can make once you buy a house. If the house is decorated in a way you find very appealing, you may find yourself instantly smitten and forget the things you are really looking for in the house. Conversely, a house with unappealing décor may scare you away. Try to think more in terms of the floor plan than the surface stuff. Try to take in the size, the condition and natural light situation.
Falling in Love With the Home
“Earth to love struck home Buyer, they’re building more homes every day!” The one group of consumers I see getting taken advantage of the most are those that “fall in love” with a home.
They will accept any terms set by a Seller. They will buy the home and tell themselves “It just needs a little work, I can do that myself.” Even though they have never picked up a hammer in their life. They let their “love” cloud their vision and Judgement.
Buying a Money Pit
Don’t buy a fixer-upper if you don’t know how to fix it up. A lot of people get themselves into situations like this. They think, “Ah, how hard can it be?” Little do they know …
Not Using an Agent
I’m not aware of any state that makes a Buyer pay for their Agent. The Buyers agent normally gets paid from a cut of the listing fees or the commissions are split. If you choose wisely, you can put a trained real estate professional on your side for free! A true Buyers agent can help you negotiate a contract, fly through the mountain of paperwork, help you find the right home and help you schedule the needed inspections and appointments necessary when you do find your dream home.
Putting Up “Non-Refundable” Earnest Money
This is like giving the Sellers a check and saying, “Here, you keep this. Even if we don’t buy your home, you can keep our money”. That’s just not smart. If your Agent recommends it, find another agent because they don’t have your best interest at stake.
With a glut of properties to chose from in the market right now, there should be no reason to make any of the above mistakes. You just need to be aware of them. Buying a house can sometimes mean buying its problems. From noisy neighbors to black mold to leaky gas tanks, there’s a lot that can go wrong.
Every homebuyer should take note to avoid any one of these costly mistakes.
Let us find the home that’s right for you!
Contact one of our real estate agents today. They know the neighborhood.