Home buying is a big deal – and the more you know about the process, the more confident you'll be in making a decision. Unfortunately, there are many common home buying mistakes that first-time buyers make. By being aware of these traps and avoiding them, you can navigate the home-buying process with ease and cut costs along the way.
Purchasing a home is a major investment, and it can be an even more expensive process than it needs to be if you fall prey to at least a few common mistakes. We're here to help you avoid those pitfalls.
• Paying a higher price that they want
• Compete with another buyer and lose the home
• Finally buying the wrong home
Let's discuss the 5 most common and expensive buyer's traps and how to avoid them:
1. Unable to Know for a Fact How Much to Offer
If you fail to research the market in order to understand what comparable homes are selling for, making your offer would be like bidding blind. Without this knowledge of market value, you could easily bid too much, or fail to make a competitive offer at all on an excellent value.
2. No Seller’s Disclosure
Even if the seller provides such disclosure, not all the time they are accurate. Sometimes the seller has never lived in the property or he/she is unaware of some physical defects that may alter the value of the home. You want to maximize your investments so is the seller.
Conduct an inspection of the home within 5-7 days of executing the contract and always put the inspection contingency in your contract. Hire a licensed third-party inspector, you want someone objective in the inspection. Review your inspection report with your real estate agent within the inspection period and negotiate price or ask for a credit to the seller if the dollar amount of repairs is too excessive, I will say $5,000 or more is excessive
3. Unexpected Costs
Unfortunately, it’s very common to find unexpected costs at the end, just when you are going to close, you discover them and sometimes it brings delays and more problems than solutions to fixing these “mistakes”. As soon you are pre-approved by your lender ask for all costs related to the transaction. For most of them, you will have to wait until you have a contract and a closing date to get the correct prorations. So, throughout the process be aware of those fees, ask questions and get your answers. Some of these fees are the following: your actual closing costs, transaction fees from your realtor, homeowner and mortgage insurance, underwriter fees, etc.
4. Breach of Contract
Every contract has specific terms to be met by both buyer and seller. When one of the terms is not met there is a breach of contract. Most of the terms are concerning buyers’ obligations for example, the inspection period. If you don’t comply with it, the seller assumes that you are either waiving your right to inspect or that everything is fine for you, which can lead you to lose money.
5. Getting the Wrong Home
It seems easy to know what do you really want, but sometimes buyers get excited and their emotions can cloud their judgment. Maybe you end up with a house much smaller than the one you really need or with a longer commute to your work or children’s school. At the beginning of the process make a list and define your wants and needs and prioritize them. Be clear about which ones you can negotiate and which ones you simply can’t.
