All are Six Costly Mistakes Home Buyers Make and How to Avoid Them. Buying a home can be one of the most exciting experiences. At the same time, buying real estate involves a significant investment. And there are several potentially expensive mistakes home buyers should avoid. Here’s a quick rundown of the six most common home-buying mistakes and what you can do to avoid them.
Working with multiple brokers.
Homebuyers make the classic mistake of working with multiple real estate agents. And end up having a trusting relationship with none of them. That’s a real bargain for buyers – they get professional representation for free. A good real estate agent can provide invaluable assistance not only in finding the right property but also in negotiating the best deal. And guiding the purchase transaction process, which can be both complex and confusing.
Not Being Pre-Approved for Home Financing.
Not only do you need to know how much home you qualify for, but your Loan Officer should also help you calculate your purchasing budget, estimate your down payment, as well as close costs and monthly payments. Your lender should clearly explain the different mortgage programs available to you and help you choose the one that best suits your personal situation.
Choosing the Wrong Type of Mortgage.
The most popular mortgage type in the United States is a 30-year fixed-rate loan. Yet, statistically speaking, an average homeowner has less than a 1% chance of keeping their mortgage for the entire 30-year term. Typically, 30-year Fixed Mortgages have the highest interest rates and are the most profitable for lenders. A better approach is to match the term of the mortgage to your expected length of homeownership.
A fixed-rate term of your loan can be 5, 7, 10, 15, or 30 years. In general, the shorter the term, the lower the interest and interest costs during the term of the loan. The right term of your loan can literally save you tens of thousands of dollars in interest charges. Six Costly Mistakes Home Buyers Make and How to Avoid Them.
Not having your own “dream home buying team”
Buying real estate is complex. And involves large sums of money, so it is critical to have a team of trusted professionals who will assist you in the transaction. Once you have selected your broker and pre-approved by the lender, you and your broker should start building your own “Home Buying Dream Team.”
The team should include: a real estate insurance agent, a home warranty company, a real estate inspector, a pest control company, a financial planner, and a tax advisor. If your future home buyers need repairs and/or improvements, you may need a contractor, interior decorator, and an architect.
Not having professional home inspections.
In addition to new construction, most homes are sold as they are. In many states, such as California or Hawaii. sellers have a legal obligation to disclose all known material facts about the property to the buyers. However, home buyers are still responsible for conducting their own due diligence to determine the condition of the home they are purchasing.
To aid in this process, homebuyers should hire trained professionals such as contractors, home inspectors, and pest control companies to inspect the property and issue inspection reports. Professional inspections cost money but can save lives by avoiding expensive surprises after escrow closes.
Being an Impatient Home Buyer.
The real estate market is heating up and multiple offers are common. The natural reaction is to rush to write even more offers. A better approach is to follow these. However, home buyers are still responsible for conducting their own due diligence to determine the condition of the home buyers they are purchasing.