The Ten Dumbest Mistakes Smart People Make When Buying a Home-And How To Avoid Them

•  Feeling obligated to take the first Realtor that comes along
Interview Realtors and choose one that will meet your needs. They all make promises but only a few will deliver. You are in control; don't let someone make you feel obligated. If your first choice is not working out, make a change.

•  Making an offer without knowing how much you can afford
You may have a solid income, but it's never wise to make assumptions. You might find yourself overextended with a larger than desired mortgage payment. It can prove to be expensive and could cost you your deposit if you withdraw an offer after getting bad news about what you can really afford. Do your homework and be prepared before moving forward.

•  Taking advice from the seller's agent as gospel
You are asked to sign a mandatory disclosure form so that you always know whom the real estate agent is representing. Take the seller's agent's advice with a grain of salt and double check just to be sure.

•  Being pre-qualified instead of pre-approved for a mortgage
This will clearly put your offer at a disadvantage, particularly in a seller's market. A pre-qualification is simply based on what you say to the lender without any documentation. A pre-approval says that you are qualified for the loan subject to an appraisal of the seller's property. There are many different mortgage programs to choose from. Getting advice from a tax expert or financial planner will help you to see the whole picture and make the best choice.

•  Accepting verbal agreements or extensions
An agent may say that the seller accepts your price and terms but a seller can accept a better offer, without recourse, until they actually sign your offer. Verbal extensions can also prove to be a problem when it comes time for your mortgage commitment. Always get it in writing ASAP!

•  Starting without having a clear picture of what and who is involved
Have you considered the number of people involved in the process of buying a home? The list is likely to include most of following: Realtors, sellers, lender, underwriter, appraiser, attorneys, home inspector, insurance agent, movers and possibly more. Think about building your own team and keep an eye on the overall process. Start with a knowledgeable Realtor and explore their recommendations.

•  Not discovering hidden defects before buying a home
A qualified building inspector is an important part of your team. A good inspector will do more than look for hidden defects. They will inform you about maintenance issues and show you how the systems work. Ask if you can call a couple of their past clients, if time allows. Don't make your choice based on who is the least expensive. You might take some time to talk with home inspectors before you even make an offer.

•  Allowing emotions to rule
Emotions can fire up at any time during the process. The seller may prove to be very difficult and appear unreasonable. You might have second thoughts after putting a home under agreement or become frustrated and discouraged. If you feel your emotions are taking over, stop! It's time for a reality check. Have someone you trust help you take a different perspective on the situation. Don't make decisions when you're upset. Find the root causes and be practical.

•  Agreeing to the wrong mortgage and spending thousands of dollars on needless interest and taxes
Many mortgage representatives want you to sign on the dotted line as quickly as possible. Some are more focused on the immediate transaction than the great business potential that a truly satisfied client represents. When it comes to mortgages, we all need an education because programs constantly change. Don't focus simply on the rate or look at a 30-yr. fixed rate as forever. Start by looking at where you want to be in five to 10 years and then back into the loan program that fits best. Doing your homework up front will go a long way in reducing stress during the process.

•  Believing you can do it all on your own
Let's face it-you're going to need help. Look for those with a consultant's mindset. Consultants present the options and information to help you make the best choice for you and your family. Salespeople, on the other hand, limit choices and information. They are simply focused on the sale. Keep this in mind as you move forward.

In Summary:

• Choose The Right Realtor To Meet Your Needs!
• Create a Plan (You can always change it.)
• Get Pre-approved for a Loan
• Understand The Process Before Diving In
• Don't Hesitate To Ask For Help To Identify Valuable Resources

Our experienced consultants can help you navigate the waters to a successful sale. Please contact one of our associates for more information.

Please email any questions or comments: info@yourguidehome.com

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