Here are the top 10 mistakes buyers make that you need to avoid and how you can avoid them:
1. Not knowing what you want. Consult with your family about what’s important in terms of size, location, etc., and then sit down with a Realtor who will ask you the right questions to ensure they meet your needs and find the right property.
2. Not knowing what you can afford. You need to know what your budget is before you start looking at homes. I see it happen all the time: People start by looking at all types of homes in different price ranges. All that does, though, is create a sense of false expectations and make the process discouraging.
3. Not getting pre-approved before house shopping. Remember, pre-approvals and pre-qualifications are completely different things. With a pre-qualification, you just fill out a tiny form, and within minutes, you’re notified of what you can probably afford. A pre-approval is far more effective, though, for a couple of reasons. First, it allows you to put your best foot forward when making an offer—a pre-approved offer is as good as cash. It shows buyers that you’re qualified to buy and the transaction will close if your offer is accepted. Also, it allows you to explore different types of loans, and that dictates your monthly payments.
4. Neglecting to consider the overall expense of owning a home. With my clients, I make sure they know what the electric bill, utility fees, etc., will be for any home in which they’re interested. For example, my wife and I once wrote an offer for a house, but then we discovered that the monthly electric bill was $600, so we withdrew that offer.
5. Paying too much for a staged home. Research shows that people tend to spend 5% more for a staged home. This is great for sellers, but on the buyer side, it’s our job to remind them that none of what’s inside a staged home comes with that home after purchase, so don’t focus too much on the furniture. This can give you a good impression of how you can furnish the house, but unless we negotiate for the furniture inside the contract, you have to overlook this factor. Otherwise, we’ll just write the offer based on hard data of what other homes have sold for in the community.
6. Not thinking of the future. How long do you think you’ll own the home you are interested in? If you want to move in five years, that’s fine, but if you can’t see yourself living there for even a couple of years, don’t buy the home because you may not make any profits if there hasn’t been enough time for the home to appreciate. Also, consider what the neighborhood will look like in five years. What are the plans for future development? How will they affect your resale value if you don’t want to keep living in that home?
7. Not having a home inspection. Having a professional home inspection before you close on the sale is one of the most important parts of the process. Review the inspection report carefully to make sure the home is in good condition. You don’t want to buy a home that has serious issues such as mold, water damage, or pests.
8. Not doing a walk-through before closing. Visit the property after all the furnishings have been moved out to make sure there are no surprises. If you’re buying a new home, you’ll typically do a walk-through with the builder’s representative. Items that are not completed will be entered onto a “punch list,” which will be discussed at closing. Get a written confirmation on when those items will be completed by the builder.
9. Not understanding the contract. Make sure everything is in writing. A professional Realtor will help you understand your responsibilities under the contract and walk you through the closing process so you don’t lose money.
10. Choosing the wrong agent. You want to hire an experienced Realtor—not just a relative or friend. You can ask your friends, neighbors, relatives, and business associates for recommendations. Then select at least three individuals to interview. Hire someone who understands your goals and will help you find the perfect home at the right price.
If you’d like to know more about how to buy a home the right way so that you get the best deal possible, don’t hesitate to reach out to me. I’d love to help you.