The home buying process can be an exciting endeavor or one fraught with problems. There are so many steps in the process, from search to close, that mistakes and omissions are bound to happen.
But, you can work with a buyer's agent that will guide you carefully through the landmines and help you avoid many of the unpleasant and costly surprises in your home search.
Here's Part 1 of the Top 10 Mistakes Home Buyers Make:
1. Not Being Pre-Approved for Financing
Going home shopping without a loan pre-approval is like going to the store without your wallet. It's just a waste of time. Many buyers are simply not aware that as part of their offer on a property they are required to notify and PROVE to the seller how they plan to pay for the purchase, whether it’s financing or cash. You cannot wait until after the contract is signed to worry about a pre-approval.
2. Not Knowing or Ignoring the Current Market
Many home buyers go shopping with blinders on, not aware of and even ignoring the current housing market in the area. This could end up costing you time and lots of money, not to mention a property you really like. The housing market is always changing. Be sure to compare communities and homes above and below your own price range. That is the only way you will know if your purchase is well priced and a good buy.
3. Going at it Without a Buyer’s Agent
So you found a home you like through an open house, a sign, or on Craigslist and you are placing and offer and working directly with the seller’s agent. What agent wouldn’t love to represent both sides of a transaction and earn all the commission? However, this is both foolish and bad business. You wouldn’t expect a divorce attorney to handle both ends of a divorce, why would you expect a seller’s agent to do the same with your transaction? It’s difficult to remain objective when you are representing both sides. Make sure you have a buyer's agent.
4. Approaching the Seller Directly
There are few instances more cringe worthy for an agent than when the buyer meets with the seller directly at a showing or inspection. Telling the seller that you plan to gut their kitchen or change paint colors is not necessary nor the best way to win a contract. Let your agent do as much of the talking as possible. And, don’t swap phone numbers.
5. Not Compromising on the “Wish” List
I recommend that buyers separate their wish list into two – “software” and “hardware.” The “software” list includes cosmetics that can be changed at any time such as paint, floors, doors, etc. The “hardware” list involves renovations that are more difficult to complete or involve permits and contractors, like additions, pools, roofs, etc.
You may find a house you love but can’t stand the kitchen cabinets. Changing out the “software” cabinets may be a lot easier on the pocket book than adding a “hardware” fourth bedroom. You need to see past the bad paint job and clutter.
Watch next week for Part 2 of the Top 10 Mistakes Home Buyers Make!