Even though it is a buyers market, people looking to buy a home make some very common mistakes. It doesn't matter if you are buying your first home or you are re entering the real estate market.
The market got a temporary boost when the government put the federal homebuyer tax credit into effect. In April when those tax credits expired, the market dropped to the lowest levels in ten years. The buyers who stand to benefit the most from the weak market and low interest rates are first time buyers who don't have an existing home to sell. But even with these things in your favor, there are still some very commen mistakes that can be made.
Many people think that they don't need an agent to help them find a home. And while it may be true that you can find a home on your own, a qualified and compitant real estate agent can make the process easier. Real estate agents know the current market and have access to all of the most up to the minute listings. They can help you find a house in your price range, they will do all the negotiating for you, set up home inspections and guide you in the area of financing. Find an agent that you are comfortable with. Ask friends and relatives for referrals and meet with 3 or more agents before selecting one to work with.
There are many tools available to you on the internet that can be used to help you in the
search for a home. But you should use them as guides and let a professional help you in the end. Many people use
and mortgage sites to find out what they can afford to spend on a home, only to be disappointed when they find out that lenders will not land them the amount they thought they qualified for. The process for obtaining a mortgage has changed tremendously in the last few years. Applicants will be subject to stricter criteria and several credit checks. It is best that you visit a bank or mortgage lender before you even begin your search for a home. Most agents won't even take you out looking for homes without a pre-qualification form a lender. Once you have your pre-qualification, you will know what price range to look in.
Another common mistake is the home buyer who wants to buy an older home at a lesser price, and remodel it. The cost of remodeling and rennovating older homes is not always worth the lower price of the home. These repairs can be very costly. If you have your heart set on an older home, ask for a long due-diligence period, this way if you find out that the cost of the repairs isn't worth it, you have time to back out.
Along the same line, don't fall so hard for a house that you neglect to take in the neighborhood. Sometimes when you love a house so much you tend to block out the negative things about the neighborhood. Is it too noisy? Too many kids? Not enough parking spaces? These things may not seem as important when you first start looking, but you will live in this home and this neighborhood for a long time, so you should make sure that you will be comfortable there. You can always fix up the home that way you like, but there isn't much you can do about the neighborhood.
Finally, with the market being hit so hard, many home buyers think that they can pay what ever they want for a home and make very low offers. While it is okay to start off low, you should keep your offer as close to the comps as possible. Granted, in this market, most homeowners are not fielding multiple offers for their homes, but they don't want to give them away either. When you find a home that you are interested in, base your bid on the prices of
recenly sold comparable homes in the area. There are good deals to be had out there, keep your expectations realistic and you will find the home for you.
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