Real estate agents see buyers make a lot of costly mistakes. Read about the 10 biggest
home buying mistakes you can not afford to make & how to avoid them.
Are you making a huge home buying mistake? You may be surprised at how often buyers make costly mistakes - even after being warned by their agent.
In this blog industry experts discuss the most common mistakes, how to avoid them and how to recover when a mishap happens.
Home Buying Mistake #10 - Buying Big Ticket Items before the closing
You found the home of your dreams and you're under contract. Time to start buying furniture for your new house, right? Wrong.
Jill R. Silvas, SCRP and Branch Executive/V.P. of Relocation Services noted mistake number 10 this way, "They [buyers] frequently go out and buy ‘big ticket’ items while they are looking for a home or are in a condition offer time (like a car, expensive furniture, etc.) which can impact their credit and consequently their ability to get a loan.
How to Avoid Making this Mistake: Reign in your urge to spend and save the big purchases for after the close. Even piling up a lot of small purchases on a credit card needs to be avoided.
How to Recover if You Made this Mistake: If you've made a big purchase that you can return, do so. And make sure that it no longer shows up on your credit. If anything is already in the works but not yet completed, put it on hold and explain to the other party that you're under contract to buy a home and you can finish the transaction after close. If you can pay off anything that was bought using credit do so as soon as possible.
Home Buying Mistake #9 - Underestimating the Market
Michael Signet, Executive Director of Sales said, "In my opinion the biggest mistake is underestimating the market. By this I mean that every buyer seems to think that they are the only ones interested in the property. They mistakenly assume that their best strategy is to go slow and make the seller sweat. We tell our buyers all the time…don’t play games. Look at as many properties as you want but when you find “the one” go in fast and strong and make sure you get it."
Monique Bryher, Broker-associate/Realtor at Pinnacle Estate Properties, added:
"Even though this is a "buyer's market," some buyers get overly confident and kill their own transaction. This is by either low-balling the seller or making excessive and/or puffed-up estimates for repairs or repair credits."
How to Avoid Making this Mistake: Keep in mind that real estate is local and every market is different. Just because the market overall is sluggish doesn't mean that it isn't competitive in your area. There are always other buyers out there and all it takes is one other offer to keep you from getting the home you've been looking for.
How to Recover if You Made this Mistake: If the home is still on the market or you're still in negotiations think very hard about how much you want the house and what a fair offer really is. Come to the table with something that is based on facts, like comps, not assumptions about how the market affects your ability to negotiate.
Home Buying Mistake #8 - Not Having All Your Paperwork in Order
As you may well imagine buying a home involves a lot of paperwork. Being prepared with your paperwork is vital for every step in the home buying process.
When asked about the biggest mistakes that buyers make, Jill R. Silvas, SCRP and Branch Executive/V.P. of Relocation Services had this insight: "They [buyers] fail to respond in a timely and/or complete manner to the various providers ( loan officer, agent, etc.) for information and documents that are needed during the process."
How to Avoid Making this Mistake: Make getting your documents in order your top priority before viewing homes or contacting a lender. Ask your real estate agent/mortgage broker what all documentation you will need for loan approval and start requesting copies of documents you may not have in your possession, such as this year's T4 – letter of employment. Follow up with your agent to discuss what all will be needed after you're under contract. Make yourself available.
How to Recover if You Made this Mistake: If you've already started the process of looking for a home and haven't yet gotten all your paperwork in order, stop looking for homes and start looking for your documents. Talk to your agent ASAP about which documents you need now and focus on getting those together. It is also a good idea to keep your documents organized in a file or folder for easy access.
Home Buying Mistake #7 - Buying at the Top of Their Price Range
There's a term that all buyers need to take to heart when they are looking at and considering homes. That term is 'house poor'. My experience has told me that one of the biggest mistakes buyers make is, "buying a home at the top of their approval level instead of at the comfort level. In my experience there is usually a gap between the two levels. In many cases the full approval level will make the buyer house poor, unable to afford much other that their mortgage payment and necessary recurring expenses. No money for recreation or a birthday diner makes for unhappy home owners."
How to Avoid Making this Mistake: It pays to be conservative when you're shopping for a home. Use your pre-approval amount as a measure for what would max your finances out. Explain to your agent that you aren't comfortable being maxed out and to not show you houses that are at the pre-approval amount. Once you have seen something that is more expensive, its harder to be satisfied with what will make your pocket book much more comfortable.
How to Recover if You Made this Mistake: If you already own a home that is making you 'house poor' see what you can do to refinance. With rates as low as they are today refinancing could make a huge difference. If you're in negotiations on a home already try to get a lower price on the home by making other concessions such as agreeing to not ask the seller for repairs.
Mistakes number 6 to 1 to follow over the next 2 blogs...come back and visit us for this invaluable information...it certainly could save you time and money and maybe some heartache!