Here are some common mistakes buyers make when not working with an experienced Realtor.
1. Making an offer on a home without being pre-qualified for the financing
Even in a buyer’s market, a good deal is still a good deal. So, when an appropriately priced home comes on the market, serious buyers will be ready to buy right away. You need to make sure you’re pre-qualified for whatever financing you’ll need before you even start looking for a home. Otherwise, you may end up losing the home you want to a more prepared buyer who can prove to the seller that they have the ability to conclude the purchase as agreed.
2. Not having the appropriate inspections
Will your new home come with hidden defects, roof leaks, well or septic problems, radon or mold? Don’t give up your right to have the proper inspections unless you fully understand the risks and associated financial consequences. After all, don’t you want to know what you’re actually buying? The cost of identifying problems is usually less than the cost of the repairs you may get stuck making after settlement. Also be aware of inspectors with flashy brochures, cute slogans and little expertise. Be sure to use a highly qualified inspector that has been recommended by your Realtor or someone else you trust.
3. Limiting your search to open houses, print advertisements or the internet
Because the vast majority of homes are sold to buyers that are represented by a Realtor, a large portion of the home inventory can only be found on the multiple list service that’s available to Realtors exclusively. A small percentage of the homes are advertised in print and even fewer can be seen during open houses. Not even the internet has every home on the market, which you have no way of knowing if you’re looking on your own. Find a Realtor that has been recommended by someone you trust, engage them in writing and make them work for you.
4. Choosing a Realtor just because they’re well-known
All Realtors have the same basic resources and information, so they all have the ability to help you. What they don’t all have is the willingness or commitment to provide you with personal attention and first-class service. If a Realtor is too busy to give you the time you deserve, or if they just aren’t committed to your needs on a personal level, find a new agent. If you ask around, you’ll probably find a Realtor that did a good job for someone you know.
5. Thinking there’s only one perfect house for you
Buying a home can be emotional, so it’s no surprise that buyers end up falling in love with the first house they really like. Unless it’s an extreme seller’s market or you’re under unusual time pressure, there’s more than one home for you. Getting into an emotional bidding frenzy may cause you to pay too much or buy without reasonable inspections and diligence. Make sure your Realtor researches the comparable market values and helps you determine your bottom line, keep your cool and know when to walk away.
6. Not considering long-term needs
What works for you today may not work tomorrow. Write down your short term and long term goals before you start looking for a home. Otherwise, you may end up buying the first home you like without considering whether you’ll be able to live there for a long time.
7. Failing to pay attention to the details
There are dozens of important details to consider when choosing a new home. Make sure you read the agreement you’re asked to sign. Thoroughly review documents to identify covenants and restrictions of the community, easements or building restrictions on your property, allowable uses of adjacent properties, plans to widen nearby roads, school redistricting and other factors that will affect your enjoyment of your new home. Your Realtor should be reading all of these documents as well so they can assist you in identifying potential pitfalls.
8. Not knowing what your total costs at closing will be
Know what your fees will be at closing. Understand everything from transfer taxes to title company fees and escrows. The price of the home is not your total cost and your total cost minus your mortgage is not all you’ll need in cash to complete the purchase. Your Realtor can review your costs with you help to make sure you have enough cash to walk away with the keys.
9. Letting a lender convince you that you can afford more
Unless you really understand the monthly costs of home ownership, it may be too late by the time you realize you’re in over your head. Be sure that you know everything that will comprise your monthly payment, including insurance, homeowners or condo fees, front foot fees or ground rent. Then there are the expenses that aren’t in your mortgage payment, such as repairs, appliance replacements, ground maintenance, utilities, etc. Although you may be approved for a certain loan amount, make sure you’re comfortable that all costs fit into your budget.
10. Not using the services of a Realtor
Did you know that, in over 93% of home sales, the seller’s agent pays the commission due to the buyer’s Realtor? Why would you ever forego valuable counsel and expertise, provided for free, when making one of the most significant financial decisions of your lifetime? Not only will a Realtor help you zero in on the right home, they will make sure your interests are protected in negotiations, oversee the inspections, financing and title services being provided by third parties, and be your advocate leading up to and after the settlement.