Buying a home is a huge deal for everyone. Unfortunately, there are many big mistakes and pitfalls that buyers often make. These mistakes complicate the home buying process and can cost you tons of money and time correcting the mistakes.
Many buyers get caught up in the excitement of purchasing a home and let their emotions make decisions, only to find out they missed an important step. This post will explore some of the biggest pitfalls buyers make when looking to purchase a home.
Deadly home buying pitfalls:
1 – Not Getting Proper and Professional Help
It’s important to remember that while you may be able to learn a lot about purchasing a home on the internet, it is impossible to learn everything. Real estate is a constantly evolving market and something you read just last year could now be useless.
There are many aspects of purchasing a house that buyers don’t even know exist. From the buyers and sellers agent, to appraisers,to inspectors, to attorneys and mortgage bankers. Each one of those jobs have professionals that perform those tasks 8 hours a day, every day of the year, and have perfected the profession. Trying to save a few hundred dollars by skipping out on an inspection or attorneys is foolish and almost always returns to haunt you.
2 – Not Getting Pre-Qualified Before Looking at Homes
Most people enjoy looking at new homes, but do not enjoy talking about the money aspect. Obtaining a proper pre-approval will save you tons of stress later in the process.
Getting a proper pre-approval allows you to know exactly how much money you are capable of spending on a house and helps you narrow down the market to what you can afford. Additionally, some buyers are able to use their pre-approval as a negotiating tool to help get the price down.
3 – Thinking Too Short Term And Ignoring The Long Term
When looking to purchase a home people tend to think about the next 4-5 years of their life, instead of the next 8-10, which is where they should be thinking. Yes, 5 years is a long time and a lot can change from job and marital status to children, but selling your home does have a cost. If the market does not appreciate quick enough you can stand to not get your moneys worth from the original purchase.
Obviously there are many circumstances that no body is able to predict, but spending time thinking through just some of the basic scenarios can save you a lot of trouble in the long run.
4 – Not Understanding The Full Costs Involved
There are many costs involved with purchasing a home that many buyers don’t realize. It is not just pay the listing price and it is yours. There is inspection costs, moving costs, closing costs, escrows, and more. Professionals can explain and walk you through all these extra costs, ensuring there are no surprises at the very end.
5 – Not Understanding Fair Market Value
One of the biggest issues when buying a house is buyers not understanding the market price of a home. People get caught up with what their parents think it should cost, or what you can afford in total, or with personal opinions about the price of a home which often is far different than the market value. There is a very organized process to determine the market price of a home that involves reviewing similar comparable homes that sold within the nearby vicinity.
It is important to know what the market value is because a house can be listed over, under, or exactly at market price. Being able to recognize the difference between the listing price and the market price can save you lots of stress and money and help you formulate a concrete offer.