Not doing homework on area to live
Buying a home is not an easy process made even more difficult when your dream location is not clearly mapped out before you start looking. Proximity to schools, shopping, attractions, transportation and other important details can is a crucial detail that is often overlooked or dismissed when buyers find a home that is, perhaps, appealing to the eye or the wallet, but in an inconvenient part of town.
Not getting pre-qualified for a mortgage
Before looking for your home, take the time to get pre-qualified by the lender or mortgage broker of your choice. This can save you hours of time that you would otherwise spend looking at homes outside your price range or, worse yet, securing an offer on a home then finding out that you don’t qualify for financing. Pre-qualifying gives you knowledge of where you are in the market, peace of mind, narrows your search criteria and, most importantly, gives you a negotiating edge by being able to alleviate the seller’s concern over financing. This is also very important, should a bidding war occur.
Not shopping for mortgage terms
Always remember that rates are negotiable. Seldom do we see lenders offering their best rates upfront. Banks will sharpen their pencils to get your business because mortgage customers represent potential customers for other services they offer, too. It’s in a bank’s best interest to court financially-stable clients with good credit ratings. Posted rates should be viewed as a starting point. You need to know what the best rate is and this usually is done to get competitive quotes. Also, ask whether the bank will cover different costs associated with buying: appraisal fees, penalties (if you have an existing mortgage), payment options, portability and so forth. The time spent researching can save you thousands of dollars over the life of the mortgage.
Not getting a professional inspection
For a purchase to be a successful investment, the buyer must do extensive planning and research. Many people consider a professional inspection to protect their investment. Nobody wants to purchase a home only to find out later that there are defects, hidden or otherwise. Ensure that you are getting the help of a qualified professional, home inspector, structural engineer, development officer, or similar. If the inspection identifies deficiencies, you may be able to negotiate the purchase price to cover required repairs, or make your purchase subject to the homeowner remedying the problem.
Not using a professional real estate agent
Real estate agents are trained professionals. Many undergo regular training on best practices, market trends, and legislative requirements and are obligated to take re-licensing courses yearly. They can ensure the price you pay is market value or better. With extensive lists of professionals at their fingertips, real estate agents can provide expert advice on what to look for, terms and conditions to include, negotiation strategy, and more.
Buying before selling
In any market, if price is important to you, then you should always sell your present home before buying another. This way, you know exactly how much money you will have available for your next purchase. Selling your home first allows you to place fewer conditions on your purchase which makes your offer more attractive to a seller, or avoid frustration and hassles, should another offer be placed on the property you like. Sellers often will demand more money to take a “subject to” offer, if it means taking their home off the market. The other advantage is if you find a terrific house, chances are others will also find it attractive and you stand to lose it if you can’t make an unconditional offer.