Home buying is exciting and it’s similar to a new adventure. It’s easy to make mistakes though, especially emotional mistakes. Many buyers allow their feelings to cloud their judgment, hence avoidable mistakes occur. Since home buying is a big purchase, it might be the biggest investment you make. It is necessary to get familiar with the mistakes and unforeseen situations that may arise within the home buying process.
1. Foregoing the pre-approval process
A buyer who is only prequalified for a loan will be able to search for homes but sellers and their agents prefer to work with pre-approved buyers, resulting in a waste of time and effort for the self-confident buyer who is pre-qualified. Preapproval gives you more credibility as a buyer. It is important to get pre-approved to streamline your home search. This will also save you the last minute hassle of securing the approval during a purchase process, which could cost you your desired home.
2. Home cannot be insured
You may find it hard to insure homes in really poor condition or with major damages. This can be a problem as home insurance is usually required by mortgage brokers to complete a home deal. Insurers determine terms on which they offer insurance. There is little you can do in this case. Hence, you need to find out beforehand from an appraiser so you don’t get stuck with an uninsurable property. Read more about this here http://www.iii.org/article/what-if-i-cant-get-coverage
3. Passing on an inspection of the house leads to unpleasant surprises.
An inspection of the home can give an insight into previous house problems and help avoid insurance mishaps as mentioned above. A home inspection before closing is critical to buying a house and considered one of the basic steps to buying a home.
4. Home assessments make it difficult for low asking price.
Whatever the price charged by a seller to a house, the house has a normalized value based on its location, age, size, and specific amenities. Before any loan company will provide a mortgage on a home, they will require the sales party to pay for a third home appraisal. The value of the house as determined will give mortgage companies an idea of how they could sell a house if a buyer defaults on their loan.
If a seller is firm on their selling price, regardless of the evaluation, a buyer may have to pay the difference in cash. If the seller has an experienced real estate agent on their team, they are more likely to set a realistic selling price and thus avoid this problem.