Avoid the Most Common Buyer Mistakes
Shopping for a new home is an emotional experience. It comes with a myriad of details and thus, is time consuming. It is easy to get caught up in the excitement of buying a new home and overlook some important items. Home purchases can turn into a more expensive process than you had planned. Buyer mistakes generally fall into three areas:
- Paying too much
- Losing a dream home to another buyer
- Buying the wrong home
Have a systematic plan before you shop so you can avoid these costly mistakes. Here are some tips for making the most of your home purchase.
Building without sufficient information
What price do you offer a seller? Is the seller’s asking price too high? Is it a great deal? Without research on the market and comparable homes, you could lose thousands of dollars. Before you make that offer, be sure you have researched the market. A professional realtor can offer an unbiased opinion on the value of a home, based on market conditions, condition of the home and neighborhood. Without knowledge of the market, your offer could be too much. Or worse, you could miss out on a great buying opportunity.
Buying a mis-matched home
What do you need and want in a home? Sounds simple, yet clearly identifying your needs and bringing an objective view to home shopping leaves you in a better position to determine if a home meets your criteria. Sometimes home buyers purchase a home that is too large or too small. Perhaps they didn’t consider the drive to work, the distance to schools, or the many repair jobs waiting for completion. Plan ahead. Use your needs list as a guideline for every home you view.
Before you sign any closing documents, be sure the property you are considering is free of all encumbrances. As part of a title company’s services, they will supply you with a copy of the title to ensure there are no liens, debts, undisclosed owners, leases or easements.
Before the purchase is completed, an updated survey may be needed. This report will indicate boundaries and structural changes (additions to the house, a new swimming pool, neighbor’s new fence which is extending a boundary line, etc.)
For $300-$500 a professional inspector will conduct a thorough inspection of the home. This will help you have an idea of the cost of future repairs. Make the final contract subject to a favorable report.
Shopping without pre-approval
It only takes a few days to get financing pre-approval. When you are shopping for a home, this gives you more power. A seller is more likely to consider an offer from a serious pre-approved buyer.
Remember additional costs
In addition to the funds for the purchase of a home, you’ll need funds for items such as loan fees, legal fees, surveys, inspections and pre-paids (property tax and homeowner’s insurance reserves), etc.
Rushing the closing
Before you sign, ensure that all documentation clearly reflects your understanding and conditions of the transaction. Has anything been forgotten? Don’t rush.