1) Not utilizing a Realtor. With all of the information available on Realtor.com, Zillow, Trulia and Homes.com many home buyers think they should go through the process on their own. Looking online and finding homes you like is not to hard and most people can do this on their own but then what? How do you view the properties? Most homes are on a GE electronic lockbox which you need a electronic pin pad to get into. Who’s verifying all of the information for you? Two heads are always better than one and working with someone that’s seen problems with 100’s of homes, why would you not want that experience put to work for you? Are you going to try and negotiate the entire deal with the sellers and listing agent? How many homes have you purchased and negotiated on your own? Again why wouldn’t you want a professional who has closed 100’s of deals on your side and legally bound to represent your best interests? Here’s why trying to do this yourself is a very bad idea……because the Realtor’s services are paid for by the seller. What this means to you is you get a licensed professionals services for free.
2) Getting pre-qualified with a mortgage lender. For many reasons homebuyers simply do not want to get pre-qualified to purchase a home prior to looking. It does not cost anything and can save all parties a lot of time if this measure is done prior to looking for homes. Case in point, you do your budget and say you can purchase a home for $1,600 a month. So you use an online calculator and this tells you that you can purchase a home for $300,000 for example. Many online calculators do not account for property taxes and insurance. You spend months finding the right home with your Realtor, and want to write an offer. A pre-qualification is required to submit your offer so you finally contact a lender. The lender tells you that with your debt to income ratio you can purchase a home for $1,200 a month and a maximum purchase price of $ 225,000. All the homes you have viewed for months were nowhere near this price point and you have to start the entire process all over. Lending requirements have changed, and it’s critical you talk with a professional and have your file screened to ensure everyone is on the same page. Also, the homes you view have to qualify for which loan you qualify for, some are listed as cash or conventional, others may accept VA, and some FHA. If your getting an FHA loan and all the homes you view will only be excepted for Cash or Conventional loans then again, your starting over. The best practice is to get pre-qualified and get all of your financials turned into your lender so they may determine exactly what your payments can be and the purchase price so you have the best opportunity to streamline the process and save you time and frustration.
3) Do not skip your home inspection. Many buyers feel they can save 350 to 500 dollars by skipping a home inspection. This in my opinion is the most important part of the buyer’s due diligence period. I know if you’ve owned a couple homes you think you know what to look for and that a home inspection is an added cost. However, home inspectors are very important to this process as they can identify things THAT WE CANT SEE! They are on your roof finding cracked roofed tiles or misplaced shingles, Many have thermal cameras that can detect moisture in your ceilings and walls, electrical problems that may exist outside of an outlet being out, air conditioning systems, plumbing problems and various other items of interest that may escape the naked eye. If there are major problems your Realtor should be negotiating with the sellers agent to ensure a qualified professional fixes these issues. The initial investment of a home inspection is money well spent in my opinion and could ultimately SAVE YOU THOUSANDS!
4) Thinking purchasing a fixer upper is a good idea. If a home just needs paint then this definitely is an option. I love the DIY network as much as anyone, however, if it has numerous structural problems, electrical problems, plumbing problems, this is probably better left to the professionals. Thinking you can do some jobs for less money sounds like a good idea, but often times in older homes one problem can lead to two or three more costly ones. Ultimately this can cost you 4 to 5 times what you budgeted for initially and your stuck. Being realistic about the cost and totality of problems with a home is paramount. Getting a thorough home inspection from a professional is crucial for you making the decision of if a fixer upper is for you.
5) Thinking your going to steal a home with a low ball offer is not how real estate is working in 2014, This worked for some in 2010 or 2011. Now this is not to say if a home is priced way above market and you submit an offer at market price it wont float. This is to say a home is in great condition and is priced at market value and you watched the real estate network over the weekend and decide to offer 20 percent less. Yes, in some of years past with foreclosed homes and short sales with tons of damage and differed maintenance some banks would except lower than market values. But there was a good reason why they sold for less money and that was by and large due to the property condition. In 2014 most homes are being sold traditionally and most sellers either have equity or can break even on the sale of their home. The chances of them taking money out of their pocket so you can profit immediately is simply not commonplace in todays real estate market. You should work side by side with your Realtor and lender to see what the best option is for you when you decide what price to offer on a home.
Ewen Real Estate is happy to provide you with this information and please contact us for your FREE No Pressure consultation if you may be thinking about purchasing a home so we can take the stress out of the process, educate you on what to expect, guide you through the process and ensure you enjoy your experience purchasing your home. Michael Ewen can be contacted at (623)824-6274 or email firstname.lastname@example.org