Popular home buying mistakes to avoid
Take a look at the top 15 home buying mistakes most people make. You can make a smarter choice than most other people if you can be aware of what not to do when buying a house.
- No research: Don’t be hasty with your decision. Do your research properly. Take a little time to evaluate your options and do your research. You need to be aware if you are getting a good deal or not.
- Not knowing about price and not enquiring: Not everyone is aware about the price of a home. Many home buyers do not compare the price of homes. The best thing to do would be to get a CMA or a Comparable Market Analysis which lists things like addresses of recently sold homes, price, date sold, number of bedrooms, bathrooms etc. So you can easily compare from this CMA before closing on a deal.
- Advice from a dual agent: A dual agent represents both the buyer as well as the seller. Since the commission that the agent would receive is based on the selling price that will be fixed, the agent will only naturally be more interested in the seller and negotiating for the seller. It is better that you have your own agent if you are a buyer. You may consider a dual agent only when you get a price break. But get your homework done before you proceed.
- Choosing the wrong lender: If you choose a lender just because the rates are low, it is not a very good idea. The interest that you pay on your loan depends on a lot of factors. So getting a loan with a low rate of interest doesn’t always mean that you have a good deal. Be aware of the closing fee and other charges. Some lenders will only disclose the discount system. Get to know the hidden costs (if any).
- Being blind about your realtor: There have been several instances where a home buyer ended up paying high rates. People have also ended up getting the wrong loans because they have blindly followed what their realtors asked them to do. Remember, you are the one who needs to take your financial decisions. Your realtor is adept in selling homes. He may not have the best financial brain available. Since they get their commission once the deal is closed and the amount also depends on how much you close the deal for, your realtor might lead you to a deal that does not have your best interest in mind. You could compare at least 3 rates to conclude on the best deal.
- Not using written agreement: Your purchase contract is made up of a lot of details. Have everything possible in writing. In these cases don’t just take anybody’s word for something that you want to be done in the property that you buy. Simply make sure that each item that you discuss and come and have mutual consent to is documented. Oral agreements are hard to prove and misscommunication can happen any time. So it is better that you have all important things in writing.
- Not getting the rate lock statement: When you finally lock your rate of interest, the mortgage company is supposed to notify you. Whenever it is that you lock the rate with the mortgage company, get the statement in writing. Also get other relevant particulars about the program.
- Choosing the wrong mortgage: Sellers usually approve of buyers who have their mortgage pre-approved. This is the reason why many individuals rush through their mortgages without inspecting properly in a hurry to buy a home. Before you get your mortgage approved, consider the pros and cons. See if you can afford to repay the loan with the interest they would be charging. When you pick your package, do it with care and analyze with precision to avoid any hassle in the future.
- Not thinking about resell: When you buy a house you may be so excited that you may completely forget about reselling. But as you go from one house to the other, put yourself in the shoes of the resellers. Observe what they are facing while trying to sell their homes. You may face the same things when it is time for you to resell your home. Having done this then decide whether you want to buy a certain house you have chosen.
- Buying without professional inspection: It is highly recommended that you carry out a proper inspection before you close your deal on a home. If you can appoint a professional home inspector, it will do you good. Your home inspector will have the eye for details and can inform you if there is any kind of defect and needs repair. Again, inspection reports can be a great negotiating tool when you want to close your deal and ask the seller to make repairs. If your seller makes the repairs, you must get your home inspector to verify again to see if things are completed.
- Blindly signing document: You should never sign any document without reading it. Many individuals commit this mistake and then fall into trouble when a certain clause in the agreement is not suitable to them but have to abide by it because the agreement has been signed upon. You cannot possibly read the whole document when closing. So do not hurry. Make sure you fully understand what is written in the document. If you don’t understand, feel free to ask.
- Not shopping for more: Prior to closing your deal you should shop around to get the best deal. Many buyers do not remember about homeowners insurance, but remember you must get your property insured before you close the deal. Home owners insurance is expensive and if you do not do your bit of last minute shopping, you may end up paying a high rate.
- Buying the wrong home: Before you buy a house, make a list of what you want your house to have and what not to have. Your house must be according to what your family requires. There might be a plush house with beautiful Victorian style interiors. But that may not be your requirement. So why end up paying for something you don’t need? So make a list of what you want and see if you find a house that matches your list.
- No check on the neighborhood: A good neighborhood is very important. You need to have good people around you to be able to stay safe and good. You can check the neighborhood to see if you will have like minded neighbors. Most individuals forget about the neighborhood in the excitement of buying a house and then have trouble settling there.
- Being impatient: It is true that when you have seen a house you really like, you want to get it as soon as possible. But this is the time when you need to be very patient. You may end up with the wrong house, pay too much and not have a comfortable house if you are impatient.
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