Buying a home can be one of the most exhilarating experiences. After all, for most of us, a home is much more than just a shelter – it is where dreams and memories are made. At the same time, purchasing a property involves substantial investment and there are several potentially costly mistakes, which homebuyers should avoid. Here is a brief overview of six most common home buying mistakes and what to do to avoid them.
Mistake #1: Working With Multiple Real Estate Agents
Many home buyers make the classic mistake of working with multiple real estate agents and ending up not having a trusted relationship with any of them. If you are buying a home, typically your agent’s commission is paid by the Seller as Listing Agents split their commissions with Buyers’ agents. That’s a real bargain for buyers – they get a professional representation at no cost to them. A good Buyer’s Agent can offer priceless help not only with finding the right property, but also with negotiating the best deal and guiding you through the purchase transaction process, which can be both complex and confusing.
Mistake #2: Not Being Pre-Approved for Home Financing
Not being pre-approved for mortgage financing is another common mistake. Not only you should know how much home you qualify for, but also your Loan Officer should help you with figuring out your purchasing budget, estimating your down payment, as well as the closing costs and monthly payments. Your lender should clearly explain various mortgage programs available to you and help you choose the one which is best for your personal situation. Being pre-approved is like shopping with money and it gives you a significant advantage when it comes to writing offers and negotiating the best purchase price and terms. Sellers don’t take very seriously buyers who are not Pre-approved for financing.
Mistake #3: Selecting the Wrong Type of Mortgage
The most popular type of home mortgage in the United States is a 30-year Fixed Rate Loan. Yet, statistically speaking, an average homeowner has less than 1% chance to keep their mortgage for the entire 30-year term. Usually 30-year Fixed Mortgages have the highest interest rates and are most profitable for lenders. A better approach is to customize the mortgage term to your anticipated length of homeownership. A fixed rate term of your loan could be 5, 7, 10, 15 or 30 years. Typically the shorter the term, the lower the interest rate and interest cost over the life of the loan. The right term of your loan can literally save you tens of thousands of dollars in interest charges. บริษัทรับสร้างบ้าน
Mistake #4: Not Having Your Own “Home Buying Dream Team”
Buying real estate is complex and involves large sums of money, so it is critically important to have a team of trusted professionals who will help you with the transaction. After selecting your real estate agent and getting Pre-Approved with the lender, you and your agent should start assembling your own “Home Buying Dream Team.” The team should include: property insurance agent, home warranty company, property inspector, pest control company, a financial planner and tax advisor. If your future home will require repairs and/or improvements, you may need a contractor, interior designer, and an architect.
Mistake #5: Not Having Professional Home Inspections
Except for new construction, most homes are sold in “as is” condition. In many States, such as California or Hawaii, Sellers have statutory duty to disclose to Buyers any known material facts about the property. However, Buyers are still responsible for conducting their own due diligence to determine the condition of the home they are buying. To help with this process, Buyers should hire trained professionals such as contractors, home inspectors, and pest control companies to inspect the property and issue inspection reports. Professional inspections cost money, but they can be life-saving in preventing costly surprises after the close of escrow.
Mistake #6: Being an Impatient Home Buyer
The real estate market is heating up and multiple offers are common. When there are more Buyers than homes for sale in any particular marketplace, it is called a “Seller’s Market.” In seller’s markets Buyers often get frustrated because they can be writing multiple offers and get outbid by other buyers. The natural reaction is to rush to write even more offers. A better approach is to follow these steps: