Top Mistakes to Avoid When Buying or Selling a Main Line Home
Attending an Open House or New Construction without me.
Builders prefer you to be unrepresented. It is cheaper for them. And at the same time, they have experience selling homes; whilst you don't buy as many homes as they sell. So they are in a stronger position if you are unrepresented in the transaction.
As for Open Houses, you sign a buyers agency contract and that contracts you to pay your agent and their broker, whilst in Pennsylavania this is usally paid by the seller, if the selling broker refuses to pay because you toured an open house alone, you may be liable to pay our broker.
Buying a House you cannot afford.
One of the reasons we ask clients to get a mortgage pre-approval is so they know exactly what they can afford. This avoids disappointment after looking at homes outside your budget and finding you cannot afford them. Also, remember, just because you might be able to afford a home. it may affect how you live your life, so when you get that mortgage pre-approval talk with the mortgage provider and tell them what you want to pay each month. If you like eating out twice a week, you may be better off buying a smaller house that allows you to do that.
Not supplying ALL the paperwork required.
We had a client who failed to supply the bank with their blank pages from their bank statements and it delayed the obtaining of the mortgage. Lenders today are requiring much more paperwork and the agreement of sale implies you will cooperate with the lender in providing the required paperwork. Whilst frustrating, due to current regulations banks and lenders have to show they have checked every piece of supporting evidence, even blank bank statment pages. Not supplying the required paperwork can put your deposit at risk due to breach of contract.
Changing or losing your job
Changing jobs or losing your job can and most likely will affect your purchase or sale of a home. The bank wants to know you won't run out of money and not pay the mortgage. Therefore it is very important to let us know straight away if this happens to you. Your mortgage provider needs to be updated as they will need evidence of your new pay level and it may delay settlement before they are satisfied.
Not telling me or your mortgage provider about all your debts, or payments such as alimony or child support.
We recently had a deal fall apart because a buyer had neglected to inform the mortgage compnay they were paying a small amount of child support towards their child's education. It may seem like a small amount to you, but mortgage lenders today have to itemise every deduction and payment you make.
Gift money needs a paper trail of where it came from, bank statement and letter
If you are being given any moneys by relatives or friends it needs to be documented where it came from. You cannot turn up with a bag of cash! So a letter and bank statments showing the account from which it was transferred and to which it was deposited is needed. (We warned you the mortgage process would drive you crazy.)
Not meeting deadlines as laid out in the agreement of sale.
The agreement of sale specifies, if you miss a deadline you are in breach of contract, or you may have waived an inspection that later you might find was important.
Buying anything, car or even furniture where they check your credit
Doing anything that affects your credit can affect your ability to get a mortgage. Recently a high paid executive, transferring here from another state signed an agreement to buy a house. She then went out and purchased furniture for the new house, and this purchase dinged her crdit score enough she no longer qualified for the mortgage and the sale fell apart. If in doubt, ask before you do anything.
Unexplained deposits to your account.
Banks hate cash turning up unexpectedly in your account. Lenders want to know where every penny comes from because of the new lending regulations, so however small the deposit, you will need an explanantion and proof of where and what it was.
Not mentioning you have a home to sell.
If you own another home, you need to let us know, especially if you will need to sell it before buying another home. Not revealing this before writing an agreement of sale can be considered breach of contract and you could lose your deposits.
Not mentioning you have specific allergies.
If you are allergic to cats for example let us know, we want you to be comfortable in your new home and don't want you to discover later that the previous owners pets are causing you to be sick.
Not mentioning you are getting divorced.
Getting divorced is likely to affect your credit score and therefore your ability to obtain a mortgage. It also affects how you take title to the property you are buying and requires you to show evidence of your divorce.
Changing your name.
Changing your name during a transaction can cause the agreement to be nullified. If you recently got married or divorced, make any name changes before you write an agreement of sale and make sure you have your new picture ID in the name on the agreement of sale
Not putting everything in writing, verbal agreements are a bad idea.
Sellers and listing agents may make statements about itmes that will be left behind or that the seller will "take care of" before settlement. If it is not in writing, it is very hard to prove it was said and agreed upon. So,a rule of thumb is to put everything in writing, however small, it makes for a smoother and more comfortable transaction.
Dying before the transaction closes.
Dying can cause a transaction to not close, or seriously delay it till heirs have reviewed a will and a court has passed probate. So, if at all possible, stay in good health till settlement.