Six Home Buyer Oversights to Avoid

By
Education & Training with Consumer Source

Everyday little oversights are made by everyone. Whether it’s a typo missed by spell check or a miscalculation while balancing a check book, we all goof at some point and make things slightly more difficult. In the world of real estate, a blunder or oversight can lead to a mistake that costs hundreds of thousands of dollars. So be smart and make sure you don’t make these oversights.

1. Jumping in blind. Randomly choosing a home just because it is the one you want is a bad idea. You have to do research. Determine specific needs for a home and visiting the property and surrounding community at various times of the day or night. It takes multiple views to get an accurate feel on the neighborhood, traffic patterns and crazy neighbors. This provides confidence when making the decision to place an offer on a home

2. Shopping without limits. Get pre-approved before beginning your home search or choosing a Realtor. To begin looking at properties it is imperative to seek pre-qualification from a mortgage company. Obtaining a pre-qualification letter through a mortgage company establishes the amount a home buyer is able to spend on the purchase of a home. You wouldn’t go grocery shopping without knowing you could cover the bill. Don’t do it when house shopping either.

A pre-qualification also shows proof that you are a serious buyer in the market. This provides comfort to a Realtor getting ready to spend their time and energy showing homes to a buyer, as well as a seller making a decision to accept an offer from a buyer.

3. Doing it yourself. You go to a doctor when you’re sick, you call the fire department when there is a serious fire, and you should seek professional help when buying a home. There are several key people you need when buying a home. A buyer’s agent, for one, is important because although a sellers agent or dual agent are legally required to explain to you their role in the process, you only get this warning once followed by sweet talk and glossed over half truths to facilitate a sale. Get an agent that is specifically involved to keep your best interest at heart.

Another key player to consult is a real estate lawyer. Fine print and legal jargon are hard to filter through for a layman. Have all papers and contracts reviewed before signing them. It’s just good practice because in the world of real estate ignorance is most definitely not bliss.

4. Forgetting to kick the tires. If you find yourself getting serious about property, make sure to get the proper home inspections. A home appraisal is frequently mistaken for the home inspection. The appraisal is conducted on behalf of the bank and is not a thorough inspection of possible issues that a property has, rather an estimated worth of the property. A home inspection should be initiated on the buyer’s behalf and the buyer should accompany the inspector and get photos of the questioned issues. Seek your own investigator and be sure to find out if they have any affiliation with the seller’s Realtor. Often, inspectors will canvas for recommendations from agents and thus have financial ties based on the organizations referrals. An impartial opinion is needed in this instance.

5. Accessorizing what you don’t have. A person can get quickly wrapped up in their new home. Get approved, find the right house, have your offer accepted by the seller and before the closing of the sale you go out and buy all the furniture for your new home. Be careful with your credit. Making large purchases with credit before having the final loan approval and documents signed can jeopardize the sale.

6. No Contingency Clauses. Two contingency clauses every buyer should have in their contract is a mortgage financing contingency and a professional inspection contingency. A mortgage financing contingency allows the buyer cancel a sale and get their deposit back or renegotiate the price in the event that the home is not appraised at the offered price. A professional inspection contingency protects the buyer by allowing them to renegotiate of back out of the deal when an inspector discovers unknown problems or damage.

By paying attention to these critical steps, home buyers can assure choosing a home that meets their specific needs and budget; and avoids the decision to make an offer on a home in a neighborhood that may not be suitable.

Thorough review of all contracts, inspections, and appraisals is a critical component involved in buying a home. By reading each document carefully and following a few key home buyer tips, home buyers can avoid common oversights and make the experience more enjoyable and profitable.

Comments (1)

Jim Mushinsky
Centsable Inspection - Framingham, MA

Hi Lou.  Good Information.  On number 4. the link for the proper home inspection doesn't work, you might want to edit your post to fix the link.

Thinking back to my first purchase, I think I hit all of these oversights except for number 6.

Mar 05, 2009 05:41 AM