Never, ever do these ten items
As a home buyer, you face a lot of challenging decisions as you make your way through the process. Why throw a monkey wrench into the system when you can easily avoid some of the common mistakes that buyers make? Avoiding these ten items will help your home buying adventure run much more smoothly and help alleviate the stress that buyers and their agents face.
- Tempt yourself with properties out of your price range/budget: Before even taking the first step in house hunting, make sure that you have an idea of what you feel comfortable spending for your monthly payments. Talk to a reputable real estate agent or loan officer to get a feel for what that equates to in sales price. You may qualify for a larger amount, but if those higher payments stress you out each month, is it really worth it? Why even go look at a home that is completely out of your range?
- Expect to demolish a seller in negotiations: Yes, it feels fantastic to get a deal on a home, or walk away from closing with equity, but you should remember that not every seller can afford to take a beating or huge loss. If you pound a seller down on price up front, they may not be willing or able to work with you on repairs down the road. Plus, the market is changing and it’s becoming a seller’s market in many areas. By coming in super low, you may risk offending the sellers or losing out to a more realistic (higher offering) buyer.
- Justify price based on other listings: Size doesn’t always tell the full story. Honestly, as a seller you can list your price at whatever number you want – realistic or not. When you’re buying a house an appraiser will look only at similar properties that have sold. A closed sale means that two parties (and probably a bank) came together to determine a solid value. Keep this in mind both in deciding what to offer and when considering future.
- Lie: While lying is generally discouraged in all areas of life, there’s a reason it’s especially discouraged in real estate. Things get ugly and they get ugly fast. Lying on a mortgage loan application constitutes fraud and you can go to jail for it. Lying to your agent handicaps them when they try to give you sound advice. Lying to a seller breeds hostility and can tank a deal fast. It’s far better to be truthful, even if there is a problem. Most of the time the problems can be resolved (given a bit of time, skill, and luck), and being forthcoming and honest puts everyone in a better position to solve the issue quickly and effectively.
- Skip inspections: Mold, water damage, improper building codes, electrical wiring hazards – all things that may not be visible at first glance on a home. HVAC units, plumbing leaks, water heaters, foundation cracks, and roofs can be some of the most costly repairs. Isn’t it worth having those items thoroughly checked out up front so you can 1) have sellers correct problems; 2) know what you’re likely in for down the road; or 3) back out before you get in over your head? Even new homes aren’t immune from problems, code violations, and costly mistakes.
- Quit or change jobs: If you’re getting a mortgage, there are strict rules and guidelines for verifying that you have the income to be able to pay off the huge debt a bank would be taking on on your behalf. If that income source suddenly vanishes or changes in any way, lenders suddenly start to feel very bad about that risk. If a job change can’t be avoided, it’s good to know that you’ll need at least two paystubs from the new company and staying in the same field really helps. But, if at all possible, hold off on those employment changes until after the sale.
- Take on new debt: Yes, this means hold off on applying for or opening new credit cards no matter how sweet the discount. Don’t buy furniture. Don’t buy a new car – or even a used one. And really, don’t start charging those new décor items from Pier One on your credit cards either. Lenders will pull your credit scores at the time of loan application and again at closing. All of these things can impact and change your credit score, which could mean that you lose on a loan. And a house. And time. And money. Don’t risk it.
- Believe everything you read on the internet: Real estate laws and customs vary immensely from state to state, so you always have to consider the source when reading blogs or real estate articles. Even the verified experts may only be experts in a particular region which has nothing in common with the one in which you’re buying. Also, if something’s important to you (schools, crime, or neighborhood amenities) then take the extra time to verify it from other sources. And, believe it or not, even in the MLS, mistakes can happen.
- Stop yourself from asking questions: There’s a lot that goes into buying a home and at times it can be quite overwhelming. Staying silent can lead to confusion or conflict down the road. Even if you’ve already asked a question, ask it again and again until you feel comfortable with the answer. Take notes. Be involved in the process. This is a huge investment – be an active part of it.
- Go it alone: Real estate purchase contracts are legally binding documents full of small caveats and provisions that you may not even consider when thinking of buying a home. Even when buying a new home, it’s completely worth it to use the expertise of a quality REALTOR® to provide a wealth of information and negotiating skill. From comps to property condition pitfalls to resale considerations and negotiating skills, agents deal with these matters day in and day out. Go with a pro. It won’t cost you anything. (sellers predominantly pay REALTOR® commissions in Texas).
…and don’t miss “10 Things Sellers Shouldn’t Do” if you’re on that side of the coin.
image courtesy of mueritz