10 House buyer traps and how to avoid them
- Trusting tax assessments
Some people think that tax assessments are a way of
evaluating a home. The difficulty here is that assessments
are based on a number of criteria that may not be related to
property values, so they may not necessarily reflect the
home's true value. - Bidding without knowing
What price should you offer when you bid on a house? Is the
seller's asking price too high? Are in front of a real deal?
Before making one the biggest purchases of a lifetime, you
should take a very close look at the real estate market in
the area you're a thinking of purchasing. Without the
knowledge of the real market value of the houses you intend
to visit, and ultimately purchase, your are more than likely
to make a blind bid. - Getting the wrong house
Simple questions, like what do you want in a house, can have
pretty complex answers. A lot of buyers get all excited at
the prospect of finally owning their house. So excited and
emotional, that sometimes they end up being the owner of a
house that does not answer their needs. The house may be too
big, or too small, or it's too far from work, or what looked
like just a few small renovations is much more then
expected. Take time now, before the buying process, and
define what you really want in your house. Write it down. - Unclear house title
As soon as you start negotiating your new home, make sure
that it is free and clear by having a title search done. One
of the last things you want to learn later in the process is
that there are taxes, leases or other liens on the property
you are about to own. - Incorrect survey
When you make your offer to purchase, you have to make sure
you request an up to date property survey that defines very
clearly the boundaries of the property. You never know what
type of changes may have occurred since the last survey
(i.e. swimming pool, extension to the house, fence, etc.) - Surprise fix-ups
You just can't expect every seller to sell their home in
perfect condition. Remember the old saying: Buyer beware!
You have to ensure that a complete inspection of the house
is done before you sign anything. Or if you do sign, make
sure it is conditional to your entire satisfaction after a
house inspection. An independent inspector will check the
house inside and out and give you a report outlining the
items that needs to be fixed with the associated costs. - No pre-approval
You're not pre-approved! What are you waiting for! It's
fast, it's free, and it's easy. Once you have a pre-approved
mortgage, your house shopping is much easier. You will feel
free and secure because you will know that the money you
need to purchase your deam house will be there when you need
it. - Seller neglect
If the home seller fails to do some repairs or to comply to
any part of the purchase contract you will feel very
frustrated. One way to avoid this is to agree, in the
purchase contract, to put a fixed amount of money in an
escrow fund that will cover the items the seller was
supposed to attend to. - Hidden charges
Before you make your offer, make sure you made a list of all
the costs associated with the purchase. The typical
"forgotten" cost is usually a forgotten loan disbursement
charge of some sort of underwriting fee. One way to avoid
any hidden charges is to have the lender give you the total
charges in writing. - Close too fast
This is a critical part of the whole buying process. Take
your time, read all the paperwork a day or two before you
sign. Have a lawyer go through it and make absolutely sure
that all the paperwork reflects the transaction your are
about to do. Double check everyt hing, it's the best way to
avoid a forgotten clause or to notice, too late, that
something has been added or subtracted. If there is a
problem, you will have a hours to solve it before the
closing day.
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