7 Costly Home Buying Mistakes

 

 

This important report discusses the 6 most common and costly homebuyer traps, how to identify them, and what you can do to avoid them:

1. Bidding Blind
What price should you offer when you bid on a home? Is the seller’s asking price too high, or does it represent a great deal. If you fail to research the market in order to understand what comparable homes are selling for, making your offer would be like bidding blind. Without this knowledge of market value, you could easily bid too much, or fail to make a competitive offer at all on an excellent value.

2. Buying the Wrong Home
What are you looking for in a home? A simple enough question, but the answer can be quite complex. More often than not, buyers have been swept up in the emotion and excitement of the buying process only to find themselves the owner of a home that is either too big or too small. Maybe they’re stuck with a longer than desired commute to work, or a dozen more fix-ups than they really want to deal with now that the excitement has died down. Take the time upfront to clearly define your wants and needs. Put it in writing and then use it as a yard stick with which to measure every home you look at.

3. Undisclosed Fix-ups
Don’t expect every seller to own up to every physical detail that will need to be attended to. Both you and the seller are out to maximize your investment. Ensure that you conduct a thorough inspection of the home early in the process. Consider hiring an independent inspector to objectively view the home inside and out, and make the final contract contingent upon this inspector’s report. This inspector should be able to give you a report of any item that needs to be fixed with associated, approximate cost.

4. Not Getting Mortgage Pre-approval
Pre-approval is fast, easy and free. When you have a pre-approved mortgage, you can shop for your home with a greater sense of freedom and security, knowing that the money will be there when you find the home of your dreams.

5. Contract Misses
If a seller fails to comply to the letter of the contract by neglecting to attend to some repair issues, or changing the spirit of the agreement in some way, this could delay the final closing and settlement. Agree ahead of time on a dollar amount for an escrow fund to cover items that the seller fails to follow through on. Prepare a list of agreed issues, walk through them, and check them off one by one. This is the #1 reason to use a licensed buyers agent. Their education and training gives them the expertise in negotiating and writing contracts in your behalf. In Washington a licensed buyers agent is a free service!

6. Unknown Closing Costs and Rushing the Escrow Close
Make sure you identify and uncover all costs - large and small - far enough ahead of time. When a transaction closes, you will sometimes find fees for this or that sneaking through after the “sub”-total  fees such as loan disbursement charges, underwriting fees etc. Understand these in advance by having your lender project total charges for you in writing.

Take your time during this critical part of the process, and insist on seeing all paperwork the day before you sign. Make sure this documentation perfectly reflects your understanding of the transaction, and that nothing has been added or subtracted. Is the interest rate right? Is everything covered? If you rush this process on the day of closing, you may run into a last minute snag that you can’t fix without compromising the terms of the deal, the financing, or even the sale itself.

7. Not Using A Free Buyer's Agent!

A buyer's agent is a free service in most states to help ensure buyers are getting equal representation when buying a home. Most homes on the market today are represented by a listing agent giving the seller the upper hand. Here's why our buyer agents are free and who represents whom in a transactions:

Agency: A home buyer can be represented by a "Buyers Agent". These are licensed real estate agents ("Realtor") that put the needs of the home buyer 1st by helping them find a property, negotiate the best deal in their behalf, suggest proper inspections and help with the closing process. Some buyer agents are inexperienced or charge an "upfront fees" before they'll work with anyone. The agents with Today's Home Buyer are licensed real estate professionals with years of home buyer experience and are never aloud to ask for any money from the buyer! Here are the 3 types of real estate agents and who they represent represent:

Buyers Agent - Represents the best interests of the buyer.

Listing Agent - Represents the best interests of the seller.

Dual Agent - Represents both the buyer and the seller at the same time.

How A Buyer Agents Are Paid: When a seller puts their home on the market for sale with a "listing agent" they have agreed to pay a commission to have the home marketed and sold. Once the home sells the commission from the selling is split between the agent representing the seller and the agent representing the buyer. This means being represented by a buyer's agent is free service to you!

Question 1: If the listing agent is under a contract with the seller to get them the highest price and best deal possible and you as a buyer go to that listing agent for help, then how will they get you the lowest price and best deal possible? They Can't! Many states won't allow 1 (one) agent to represent both parties in a single transaction to ensure fairness for all involved. All states does prefer each party to have it's own representation but not all require it.

Question 2: If you are working with an agent that also lists homes for sale how do you know you're not only seeing their listings or homes? Keep in mind that if they sell you one of their listings they get paid all the commission. It's getting paid twice! So, do they care more about the seller, the buyer or their bank account? Today's Home Buyer does not list homes for sale in the MLS or for a commission. All of our agents are Exclusive Buyers Agents and they want you to see everything that meets your needs.

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