Buying a home is an expensive undertaking. While it can be stressful, the dream of buying a home does not have to turn into a nightmare if you avoid the 10 deadly mistakes homebuyers often make when purchasing a home.
1. Making an offer on a home without being prequalified. Most sellers in this market do not want to waste their time accepting an offer and then risk the buyers not being qualified to buy the home. Talk to a lender before you go househunting to determine what, realistically, you can afford. Don't waste your time or the Realtor's time by looking at houses you know you can not afford.
2. Thinking there is one perfect house for you. Buying a home is a 'process.' You can tell very little from a collection of photos and text often supplied by real estate web sites. While it helps narrow down your choices, it is imperative to physically visit these homes. Some that sound 'ideal' at first glance, may lack that 'wow' factor when seen in the light of day.
3. Not having a home inspection. Okay, now you found the home you want. You make an offer and it is accepted. Somewhere between falling in love with the home and taking the step to make an offer, make sure you include a home inspection as part of the offer. It is generally included as part of the contract packet, but some people decide they don't want to pay the few hundred dollars to get a home inspection when the home "'ooks like new.' While some lenders do not require a home inspection on newly constructed homes, homes that are even a couple of years old should have a going over by a licensed home inspector. For your protection and peace of mind, if nothing else. At least you have recourse if there are problems that pop up afterwards.
4. Limiting your search to open houses, ads, or the internet. While the internet real estate web sites are available to the public, not all properties are listed on those sites. For example, a common website, www.realtor.com, only lists houses that real estate agents have paid to have listed on that site. At a cost per listing to real estate agents, many opt out of listing on that website. Your best bet for finding all the homes that are listed for sale (except for sale by owners, or FSBOs), is by contacting a real estate broker, or real estate agent you may know. There is no obligation to use that agent or broker, unless you sign a buyer agency agreement. Often real estate agent are more than willing to give you information, without obligation. Of course, they are hoping that, if they provide you with good service, you will eventually use them when it comes time to look at houses.
5. Not knowing total costs involved. Early in the buying process, ask your lender or real estate agent for an estimate of closing costs. A 'good faith estimate', while just an estimate, should give you a pretty good idea of what it's going to cost you to 'go to the table' when you find the home of your choice. Title company fees, lender fees, homeowners association fees, taxes, prepaids, and other settlement costs should be itemized. And, it is a good idea to take that good faith estimate to a couple of different title companies (settlement companies) to see how they compare. Just be wary of unknown companies who promise you the moon. Always go with a reputable company that you have researched, either through real estate brokers, friends, real estate agents, and the Better Business Bureau, to name just a few. Real estate agents have a lot of experience with settlement companies in closing deals. Tap into their experience.
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