12 Common Buyer Mistakes
- Falling in love with a house.
Buying a home can be a very emotional experience. You may find a home that you “just love and can’t live without.” Perhaps your agent is even saying, “This home is meant for you.” After all, this may be the home of your dreams. It represents security, comfort, and opportunities for memory-building. However, this is the time to be very objective and rational. Take a good, hard look at the home, both the positives and negatives. Be certain this home really meets your needs and that it also fits within your allocated budget. If you choose a home simply because “you love it”, you could be sorely disappointed when the honeymoon phase is over. You could then be facing many problems you didn’t notice at the time because you were blinded by the emotional feelings for this particular home.
- Losing control over the purchase process.
Losing control over the decisions for your purchase can have a very negative affect on the overall outcome of your home-buying experience. Perhaps you have a very “pushy” real estate agent who is frequently telling you what you need or want. You may have parents who feel their age and wisdom give them a deciding vote in your final choice. A personality clash with one of the parties involved, such as an inspector or loan officer, can affect the home-buying process. Many factors and issues may try to pull at you, but remember, you have the final say in the type and location of home you want. It is you who must be pleased with your choice, and it is you who will be living with your choice. Don’t be afraid to stay in control in purchasing the home you want.
- Being indecisive about what you want
Beginning the home-buying process can be daunting. It is important that you begin this experience on fairly solid ground. Take the time to answer some of the hard questions you may have been avoiding. Is this really the time for us to make a move? Can we afford to make a housing change right now? Do we know where we want to buy or build? Do we have a good feel for the type and style of home we need or want? If the thought of buying or building leaves you in a state of anxiety, take the time to find out what is troubling you. Once you have resolved these issues, and this make take quite a bit of time, then you are ready to actively begin the home-buying/building process.
- Beginning the home selection process before you pre-qualify for a mortgage loan.
Working with a reputable mortgage company to establish your home loan parameters before you actively shop for your home will save you a great deal of heartache in the long run. For example, you may be searching for a home on your own, or working with a real estate agent, and find that “dream home.” Because you are not pre-qualified, you don’t know if you can afford this home or even qualify for a loan on this property. By the time you meet with the loan officer and become pre-qualified, someone else has stepped in and purchased the home you felt should be yours. This can be avoided by obtaining the loan approval first and finding out how much you can comfortably spend for a home. Then you are ready to begin looking at all of the properties in your price range.
- Choosing the wrong home loan.
With the current market, there are numerous types of home loans and a great variety of options available. It will be important for you to work closely with your mortgage company to be certain your loan is the best you can obtain for your needs and circumstance
- Buying a home without doing your homework.
Too many buyers rush in buying a home, only to find there are community factors that won’t work for them. They may have ended up purchasing a home too far from work or school, or perhaps the schools are poor quality. The community may lack the cultural and other opportunities that are important to you. There may be a high crime rate or known gangs in the area. The zoning may prohibit improvements you had hoped to make on your property. As you can see, there are many factors to be considered when you are buying a home.
- Failure to be sure the home you are buying is “healthy”
Take the time to have the property inspected for such things as termites, water damage, structural problems, a faulty electrical system, and even overall poor construction. Consider such items as the level of insulation, window quality, and practicality of the floor plan. Be thorough in deciding if the home you want is “healthy” inside and out.
- Choosing a home that is the wrong size for your needs.
Avoid buying a home that is much too big for your needs, or a home that is adorable or cute, but is really much too small for your family. If you anticipate family growth, a good option is to purchase a home that would lend itself to future remodeling or additions.
- Failing to obtain your own real estate agent.
You have nothing to lose and everything to gain by selecting a good real estate agent to represent you. He or she will have your best interests at heart, and are trained to help you look at all aspects of the home-buying process.
- Failing to have your buyer's agent prepare a comparative market analysis (CMA). This needs to be done before you make an offer on a property.
This report shows recent actual sale prices of comparable neighborhood homes, present asking prices of similar nearby homes listed for sale, and the asking prices of recently expired listings of neighborhood homes which didn't sell (often because they were priced too high),
This comparative market analysis form contains the same information the listing agent presented to the seller when the asking price was set. But the local market values may have changed since then. When your purchase offer is presented to the home seller, your buyer's agent will definitely use the new CMA to justify your offer price. Without the CMA, your offer may be a blind guess, and could be either substantially above or below market value.
- Failure to include the appropriate contingency clauses in your offer.
Buyers should include in their written purchase offers contingency clauses for a (a) suitable appraisal of the home for at least the offered purchase price, and (b) home inspection performed by a qualified inspector. Other clauses may provide for typical local inspections, such as termite control, building code compliance, and energy efficiency.
Buying a home with little or no resale value.
You may find a home you “just love”, but carefully consider whether it would appeal to a future buyer. Avoid extreme construction, funky, impractical floor plans and impractical landscaping. There are many other factors to consider when deciding if a home would maintain any resale value.
As you can see, being an informed, prepared buyer, along with selecting a qualified real estate agent to represent you, can make all the difference in the success of your home-buying experience.