9 Home Buying Mistakes And How To Avoid Them

2. Not meeting with a real estate agent before looking for homes
Experienced professional real estate agents almost always insist on scheduling personal meetings with buyers before beginning a house search. There are several reasons for this. First, it allows the agent to establish a relationship and rapport with clients. Second, it lets the agent get to know you personally, which can help them better understand your wants and needs. And finally, it allows you to get to know the agent, which allows you to decide if you want to work with them or not.
Inexperienced and unprofessional real estate agents, on the other hand, often claim they can help you over the phone. Dealing with a real estate agent over the phone can lead to one of three problems. First, the agent may only try to sell you a property that you called about without first understanding your needs. Second, they may gather the information they need to search for a home for you, yet never follow up. And lastly, they may recommend properties that don’t meet your criteria.
To avoid these problems, always meet with your agent before starting your search for the perfect home. If after the meeting you decide to work together, the agent will most likely ask you to enter into an exclusive buyer agency agreement.

3. Working with the wrong real estate agent
How do you choose the “right” real estate agent? Here are some tips to keep in mind when meeting with agents. They will help you make the right choice.

• Good real estate agents work for you. They don’t try to sell you a home that doesn’t meet your needs. Instead, they provide the professional expertise you need to successfully navigate the sometimes complex home-buying process. This includes educating you on proper home-buying procedures, listening to your needs and wants, answering your questions and providing unbiased advice, and above all, always providing truthful information.

• A good real estate agent will meet with you before you begin to look at properties. During this initial consultation, the agent will gather the information he or she needs to find the right home for you. This includes asking questions about your lifestyle, family, leisure activities, priorities, your home-buying experience, your likes and dislikes, and much more. A good real estate agent will also help you get pre-approved for a loan before searching for homes.

• Once the agent gathers the necessary information and you enter into a buyer’s agency agreement, the agent will take you around to different neighborhoods. This helps you and the agent better pinpoint just the right properties to look at. Only then will the agent begin showing you individual properties.

• Good real estate agents know the housing market and housing prices. They also work with the experts and specialists that are necessary to take care of the many facets involved with buying a home, from signing the purchase agreement to the closing process. A good agent will also be responsive to your phone calls, provide timely answers to your questions and will work to keep you fully inform

4. Not acting quickly when you find a home you like
For some items it’s OK, even recommended, that you take time to think it over before making a purchase. This is not true when buying the right home, however. Why? In most cases, homes are one-of-a-kind items. Your chances of finding another home that offers the same combination of style, location, pricing, terms, availability and other criteria are very slim. That means that when you find a home you like that fits your wants, needs and budget, you need to act quickly and decisively.
It is not uncommon for a real estate agent to suggest that you immediately submit a purchase agreement if you find the right house. If you like the house, chances are someone else does, too. In fact, it’s not uncommon for sellers to accept more than one contract for a property. This is especially true if the property is in a popular neighborhood or is attractively priced. If you have concerns about the property, insert any necessary clauses into the purchase agreement. But act quickly! You may never find another home like it again.

5. Submitting a low first offer
Make your first offer your best offer. Don’t submit a low first offer (an offer that is less than the asking price) and expect to haggle over the price with the seller. This approach may work when buying a car, but it can work against you when buying a house. When buying a car, if you don’t get the one you want at one dealership, chances are you can find another identical car at another dealer. Houses are different. As mentioned earlier, each house, with its combination of location, style, and price, is unique.
A low offer may offend a seller and they may not present a counter offer at all, which prevents you from offering a better price. If they are willing to counter offer, you will then find yourself in a game of offer – counter offer, which can be time consuming and stressful. And while you are playing this game, the seller may get and accept a contract from another buyer that is equal to or better than yours. Remember, the seller does not have to sell to you. They can choose who to sell the house to.
I advise my clients to make the first offer their best offer. You may even consider offering more than the asking price. In some cases, such as with a new listing or when other people are looking at the same house, this may be the best strategy to get a home that you really want. Unless you are buying the home with cash, your lender will require that the home be inspected by an appraiser. The appraisal will let you and your lender know what the property is worth and will keep you from paying too much for a home.
To further protect your interests, be sure to work with only one real estate agent under an exclusive buyer’s agent agreement. Your agent can provide you with important information on the property, the market and the seller’s motivation. Your agent can also let you know if the circumstances surrounding a particular property would allow you to make a low offer.

6. Failing to conduct a home inspection before buying a house
Buying a house is a big investment, so it’s important to have any property you are considering to purchase thoroughly inspected before you commit to buying it. The only time a home inspection may not be necessary is if you are buying a new house that comes with a warranty that covers any construction defects. Otherwise, have the house inspected by a professional.
A good home inspection will uncover any problems that the house might have, such as structural damage, a leaky roof or bad plumbing. This is a crucial step in the home-buying process and can save you heartache and frustration down the road. Unless you are a building contractor or have considerable experience with house design and construction, it’s advised that you hire a professional home inspector. A professional home inspector will find any potential problems a house might have and will give you an unbiased report of anything he or she finds.
To protect your interests, be sure to include a home inspection contingency in the purchase agreement. This contingency will give you time to have the home properly inspected. If the inspection is not satisfactory, you have the right to cancel the purchase agreement and to receive a full refund of your deposit. This is a common practice that not only protects your interests, it also takes the home off of the market while you have it inspected. Your real estate agent can offer you advice and guidance to ensure your interests are protected. Your agent can also recommend a professional home inspector.

7. Buying a new or resale home without a home warranty
Just about anything you buy today, whether it’s a new car or a new appliance, comes with some sort of a warranty. The same is true for new homes, as most builders offer warranties on newly constructed houses. You can get warranties for resale homes as well. These warranties offer buyers an added level of protection in the event that something in the home, such as the furnace, hot water heater or stove, stops working for a predetermined time after the purchase. Whether a warranty is necessary or appropriate depends on the age and condition of the home’s components.
Sellers will sometimes offer a warranty, which they pay for, when they put the home on the market. In other cases, you can request that the seller offer a warranty when you write a purchase agreement. If the seller refuses, you have the option of purchasing a warranty yourself. Your real estate agent can provide you with information on home warranties.

8. Offering a small deposit
Most people would prefer to put down the smallest deposit possible on a home they are interested in buying. From they buyer’s perspective, this keeps them from tying up a lot of money and, if they change their minds on the property, a small deposit minimizes their risk. This strategy, however, can actually work against you.
From the seller’s perspective, a small deposit can signal that you are not very serious about the property because you’ll have little to lose if you back out of the contract. To protect their interests, the seller may counter offer your contract and demand a larger deposit. A small deposit might also put you out of the running for the property is the seller receives multiple contracts that offer larger deposits. And, the seller might also reject your offer outright.
If you find a home you want, put down a large deposit. A large deposit shows that you are serious and, at least in the mind of the seller, minimizes the chances that you will back out of the contract later. Your real estate agent can provide you with guidance about the amount of a deposit you should offer based on the price range of the property.

9. Waiting to buy
The best time to buy a house is now! Unfortunately, people put off buying homes for a number of reasons. It’s understandable, because purchasing a house is a big decision. However, people who wait and stay out of the market tend to lose in the long run. Here are some of the reasons why waiting to buy can work against you.
Many people wait to buy a house because they want to put more money aside in the bank, thinking this will save them money. This strategy rarely works. While they put away money into their savings accounts, the prices of homes are rising by thousands of dollars. It’s not uncommon for housing prices to rise by two-to-five times the rate of their savings. The result? They end up paying much more for a house.

Another common strategy is to wait for interest rates to come down. So these people wait, looking for the best financing deal. Yet while they wait, the prices of houses continue to climb. In the end, this strategy often leads to higher monthly payments because the increased cost of the house more than offsets the lower interest rate. Other people put off buying until they can afford their dream home. My advice to these people is to buy something, anything, now and use the property as a stepping stone to their dream house. Most people work their way through three to six properties before they reach the house of their dreams. If you want to live in a dream home, buy something now and start to build equity. Then, use the potential appreciation of the property to work for you. For most people, this is the fastest and sometimes the only way to eventually purchase the house of their dreams.

Perhaps the greatest reason people put off buying is fear. They’re afraid they’ll make the wrong decision or buy something they can’t afford. A good real estate agent will help you find the right property, a property you can afford, and can help prevent you from making a bad decision. Most people feel some fear when they buy a house, but they move ahead with the purchase anyway. The only wrong decision is to not get into the housing market today. Chances are that in a few years you’ll regret not getting into the market sooner and possibly not moving up into another house sooner.

I would be happy to help you buy a home. As your real estate agent, I’ll make sure you find a house that meets your needs and your budget and I’ll ensure your interests are protected. Please call me or send me an email today!