Buying a home is a very exciting time for anyone! There are many emotions and feelings that a buyer experiences during the process and buying a home is no-doubt, a process that requires a lot of focus and attention to details. There are many “moving parts” within the home buying process and unfortunately, there are many things that can go wrong when buying a home. There are mistakes that buyers make that are more common than others! These mistakes can easily be avoided with proper research and preparation.
Here are five mistakes to avoid when buying a home!
Not Getting Pre-Approved
The first mistake to avoid when buying a home is understanding what a pre-approval is and not obtaining one.
For starters, a pre-approval is very different than a pre-qualification. A pre-qualification can normally be obtained by a simple phone call to a mortgage broker. A mortgage broker will use information, such as income, debts, and assets, that is provided to them by the potential borrower to “qualify” them. These pre-qualifications are subject to verification of the information provided by the potential borrower. A pre-approval should be obtained prior to looking for a house in most cases. A pre-approval requires a formal application be completed with the lender and the potential borrower will supply actual data (W-2’s, Tax Returns, Bank Statements, etc.). Once this information is collected, the application and documents are either ran through an automated system or reviewed by a mortgage underwriter, who will determine if the buyer has been approved. There are often only a handful of “conditions” with a pre-approval, such as a satisfactory appraisal being completed once the borrower finds a suitable property.
As you can see, a pre-approval is not the same as a pre-qualification. If a buyer doesn’t understand the difference, this can be a huge mistake. In a real estate market that is seeing multiple offers on properties, having a pre-approval can be the difference and help the buyer win in a multiple offer situation! A buyer must also be aware that some lenders use the two words, pre-approval and pre-qualification, interchangeably, which is not correct. Bottom line, get pre-approved!
Selecting the Wrong Real Estate Agent
It is extremely important to a buyer or seller that they select the “right” real estate agent to represent their best interests. So when buying a home, what makes a great buyer’s agent?
There are many things that a real estate agent must do to be successful, some may consider a great real estate agent a “jack-of-all-trades.” A great buyer’s agent should be seen as an adviser or counselor, not a “salesperson.” They need to be able to discover the needs and wants of a buyer, educate them on current market conditions, help buyers locate homes that can potentially suit their needs, and much much more!
In addition to the real estate “skills” that a great buyer’s agent needs to have, there are also other things that should be taken into consideration. It is important that a buyer feels comfortable with their real estate agent, as there are sometimes personal topics discussed, such as finances. It’s also important that a buyer understands how their real estate agent is able to communicate and determine if it’s going to work for their situation. If a buyer prefers e-mailing, then they better make sure their real estate agent is able to use e-mail and checks it regularly. Yes, we said it, is able to use e-mail! If a buyer prefers text messaging, they better make sure their agent can text message! A great real estate agent should be able to adapt to their clients preferred method of communication!
Not Listening To And/Or Taking the Advice of the Real Estate Agent
Once a buyer hires the right real estate agent, now is the time to listen to their advice and trust them! A buyer’s agent should be working in the best interest of their client, the buyer! An experienced buyer’s agent should have the knowledge to guide a buyer through the transaction.
When looking at homes, an experienced buyer’s agent should be able to point out important things to look for while walking through the home, so pay attention and observe them! Once a buyer finds their dream home and is ready to submit an offer, it’s important they listen and/or take the advice of their real estate agent. An experienced real estate agent should be able to supply information to a buyer so they can make a strong offer. This is extremely important if the buyers local real estate market is a seller’s market. In a multiple offer situation, not taking the advice of the real estate agent can be the difference between a buyer having their offer accepted or a different buyer’s offer accepted!
Not Willing to Be Flexible
When buying a home, flexibility is sometimes necessary. A buyer who is not willing to be flexible will often have trouble getting to the closing table. For example, a buyer who is buying a home that is occupied, should be willing to be flexible with the closing date and/or possession date. A home owner who has lived in a home for 10 years and has accumulated 10 years of “things” may not be able to have the house in “broom-clean” condition the day of closing if they are closing on a home of their own that same day! A buyer may have to agree to give the seller a couple days post possession or “rent-back” so they have time to move out of their home. If a buyer is not willing to be flexible, it can often lead to many offers being rejected.
Having Unrealistic Expectations
Last but certainly not least, one of the mistakes that needs to be avoided when buying a home is having unrealistic expectations! When buying a home, the first thing that a buyer needs to understand is their local real estate market and what their budget will buy them (their agent should be able to help them with this). A buyer who is pre-approved for $100,000 mortgage, cannot expect to get a home that is 3,000 square feet, 4 bedrooms, 3 baths, and located on waterfront. Buyers need to be educated on what their money will get them in the market. As listed above, a great real estate agent should be able to help set realistic expectations and get their client a home they will love!
Once a buyer has realistic expectations on what their money will get them, the next common mistake is being unrealistic when it comes time to make an offer. It is so common to hear, “Zillow’s “Zestimate” said this home was worth $150,000 and it’s listed at $200,000, it is WAY overpriced, so lets offer $150,000!” Also, another common misconception that a buyer has, is thinking that the “assessed value” is the same as market and/or appraised value. Everybody loves a deal, but a buyer needs to have realistic expectations when placing an offer on a home. Sure it is possible for a home to be overpriced by $50,000, but for the most part, this is not the case and a buyer shouldn’t expect to “steal” the sellers home!
If a buyer is able to understand what their money will get them and are able to have their offer accepted, another common unrealistic expectation results from a home inspection. Home inspections are a very common contingency in most real estate transactions. The main purpose of a home inspection is to ensure the house doesn’t have any serious safety issues or deficiencies. The purpose is not to have the seller replace and repair every little thing in the home. There are certain things that are more commonly found during a home inspection, but a buyer needs to have realistic expectations. If a buyer believes a seller is going to replace a furnace that is 10 years “old” because the home inspector said it was not as “efficient” as a newer furnace, it most likely is not going to happen. Having unrealistic expectations of what a home inspection is and what the purpose is, will often lead to a buyer never getting past the property inspection contingency.
Buying a home is a big step and a major investment in anyone’s life! There are many emotions and feelings a buyer experiences. It’s important that a buyer stays focused and tries at all costs to avoid the above five common mistakes! While not easy, with the correct research, preparation, and professional advice, these and other mistakes can be avoided!
Other Useful Buying Resources
- How to Avoid Buyer’s Remorse when Buying Your Home by Debbie Drummond
- Home Buying Tips 101: Avoid the GREED Monster! by Andrew Fortune
- Are You Ready for Some Summer Home Buying Tips? by Lynn Pineda
About the authors: The above article “Five Mistakes to Avoid When Buying a Home” was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise.
We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.
Visit our website at www.HiscockHomes.com.
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