Whether the real estate market is hot or cold, prospective homebuyers need the guidance of a real estate professional. Together you can create a homebuying plan that will help you avoid selecting the wrong home and keep you from spending more than necessary.
Sometimes, the excitement and frustrations created by the competition for buying a home can result in a regrettable situation. And, when buyers are unprepared or ill-advised in making an offer on a home, they often lose out to other buyers with better offers.
Five Common Mistakes Home Buyers Make
1. Searching Without the Help of a Professional Realtor
Homebuyers who begin their search without a Realtor’s proven and knowledgeable guidance are limited to basic MLS listings, newspaper listings, mailer advertisements, and yard signs. They miss out on the advanced information on the Multiple Listing Services (MLS) available to Realtors.
Also, a Realtor will:
- Help formulate a clear picture of what the buyer is seeking.
- Offer insights into comparable property sales histories.
- Provide information about local and neighborhood conditions.
- Guide homebuyers to properties in their price range.
- Submit and negotiate offers on behalf of the buyer.
- Advise homebuyers regarding financing, inspections, and closing details.
- Maintain a line of communication with the seller’s Realtor.
2. Failing to Secure Mortgage Pre-Approval
Unless the buyer plans to pay cash, securing pre-approval for a mortgage before searching for a home is vital. Home sellers consider an offer with a pre-approved mortgage loan letter as reliable evidence of your ability to qualify for a mortgage. Plus, home sellers and real estate agents prefer buyers who have pre-approval.
In addition, with a lender’s pre-approval, you will know the maximum you can borrow to purchase your new home. Knowing your borrowing limit will help narrow your search to homes you can afford and avoid the frustration of finding a home you love that is out of your price range.
In the heat of competition, particularly in a “bidding war,” some eager buyers agree to a price they cannot afford. Some buyers may try to justify the higher cost, even with mortgage pre-approval. However, the higher price may result in borrowing at a higher, less favorable rate, which results in higher monthly payments.
Over-bidding can lead to financial struggles in maintaining the home and managing unforeseen emergencies.
4. Failure to Plan Ahead
The perfect home for a young couple may not be ideal for a growing family. Conversely, older, potentially empty-nest couples may determine that a smaller home will better accommodate their changing needs. Many have downsized to more compact, high-quality residences with amenities and lower maintenance to allow them to travel and engage in other well-earned recreational activities.
Homebuyers who regret wrong sizing their home as their circumstances change may resell the property much sooner than expected, possibly resulting in a loss.
5. Foregoing a Professional Inspection Before Closing
Home showings usually do not expose hidden problems beneath the surface. Without a professional inspection, faulty plumbing, infestations, roof leaks, wiring problems, and even structural issues are not always apparent.
Guided by the recommendations of a professional real estate agent, the buyer should have a reputable, certified inspector conduct a detailed inspection of the home. The inspection should occur well before the closing to allow time to negotiate any repairs.
The Realtor will reach out to the seller’s representative to discuss making needed repairs before the closing, or reducing the selling price, on the buyer’s behalf.
The Bottom Line
Buying a home is a major decision, and you want to make the right decision for both your family and your finances. With a real estate agent’s help, you’ll protect yourself from costly mistakes and find your dream home.