Last week we looked at typical mistakes that first-time homebuyers — and even people buying a second or third home — often make. This included shopping for a house based on what is needed today and not thinking about tomorrow. We also looked at why not having a buying plan and a flexible strategy to help you meet your goals is a big no-no.
In Part 2, we uncover two more missteps frequently made by homebuyers. Let’s begin.
Mistake #3: Going it alone
One of the most repeated mistakes homebuyers make is forgetting to seek expert advice throughout the home buying process. These are people who can help you maximize all the benefits that come with buying a home while — at the same time — help minimize the risks. Collectively, they’ll make you a happy homeowner.
When it comes to buying a new home, you’ll want to engage with a team of experts. Neglecting to do so could end up costing you thousands of dollars and cause a lot of grief along the way.
So, what kind of expertise will you need? The short answer is “different experts at different stages.” Some need to be engaged simultaneously and well in advance of buying your new home. Here’s who to talk to:
A licensed real estate agent that represents you as a buyer. The buyer’s agent — unlike the agent representing the seller — is your advocate. This independent adviser can research properties that fit your needs, carry out due diligence you don’t have time for and help you negotiate the sale. As a result, buyer’s agents end up reducing your risk without increasing your workload. Win-Win, right?
Loan officers. These professionals are sometimes called mortgage brokers or lenders. They will assist you in securing the best loan with the best rate and the best terms to suit your needs. Best of all, they will help you figure out how much home financing you can reasonably handle, so you don’t waste your time looking at homes that are well beyond what you can afford. Our advice? Have a loan officer help you get pre-approved before you even start looking.
Real estate lawyers can assist you in reducing the risk associated with buying your home by scrutinizing the contract of sale and advising you on the contract’s legal terms and clauses. Your real estate agent will be able to put you in touch with a reputable one. Or ask friends and family if they can recommend one they’ve recently worked with.
Inspections. You’ll want to get in touch with both building and pest inspectors. They will assess any structural or pest problems that may exist at the property, which could cost you big bucks to repair or rectify. These are good people to know, and because of the increase in home sales they’re hard to schedule. They’re uber busy. Try to start a relationship with one upfront so you can call them for a quick assessment when you find the home you’re interested in.
Insurance brokers. These teams ensure that you have the right policy in place to meet your lender’s requirements. You’ll need insurance to be able to close the deal on time. Line one up early on.
Mistake #4: Being emotional
Homebuyers often don’t realize the level of skill they’re up against when dealing with real estate agents, especially with agents representing the seller.
When buying a home, it’s crucial that you not let your emotions get in the way. It can lead to poor decision-making, getting into a bidding war and paying way more than you need to.
Getting emotional about a home can lead to homebuying FOMO (Fear Of Missing Out), which is the worst kind of all. Skilled agents can leverage your emotions in a negotiation, letting you know how many others are interested in the property or telling you how many other bids they expect to receive. Emotional buying can lead to costly mistakes, including your pre-approved financing not covering your inflated purchase price.
Seller’s agents are hired to get the most out of a home sale as possible. They have all sorts of ways to extract information from buyers that can be leveraged later on. So be cool and don’t let too much out of the bag when you’re house hunting. Here are some tips when speaking to seller’s agents:
- Only provide superficial information when looking for property and don’t disclose anything about your situation that will make you vulnerable.
- Never disclose your entire home buying budget to a seller’s agent. Doing so will help them know how much money they can extract from you. Some might even steer you away from the property you’re interested in and towards a more expensive listing they may have with a different seller.
- Never let it be known that the property you’re looking for is for you to live in. Say that you already live in the area and that you’re scouting out properties for a friend. Remain detached. Remember, real estate can be a cat and mouse game and seller’s agents will play on your emotions.
- Likewise, never walk into an open house and start talking about where you will place your furniture. And if possible, leave the kids at home. Loose lips sink ships.
Make no mistake!
If you’re a prospective homebuyer with questions about home financing, please reach out to one of our local loan officers to discuss these tips and other important things: how to work with a real estate agent and how much down payment you’ll need, or what happens at closing.
Or, if you’re ready to get started now, you can always apply online!