Monday, June 4, 2012

Top Home Buying Mistakes...by Austin the Realtor


I have many clients calling to go house shopping. As I mentioned in past blogs, there is preparation to be done before, during and after you find the home of your dreams. Lack of proper planning may result in pitfalls that can be costly in the long run - including wasted time, a crappy purchase and buyer’s remorse. Following a few simple steps will help your buying experience be less stressful and better your chances on getting the home you desire.

1. Failing to Find Financing First – Just like shopping for anything, you need to know how much you can spend. A home is no different. Your spending budget is determined by what the bank is willing to lend you. I’ve heard far too often from clients, “I have good credit, so getting a loan will not be a problem,” or “My budget is $300,000 because that’s what I want to spend.” Excuses such as these will cause the buyer to waste time looking at homes they may not be qualified for. Also, knowing what you are pre-approved for will help you calculate what monthly payment you will be in store for and better plan to see if it’s in your financial budget.

2. Making a Low Ball Offer – All buyers want to pay the least amount possible, but submitting an offer too low could be a waste of time. Sellers will not entertain low ball offers, and it can hurt your chances if you are really interested in the property. Also, if there are multiple offers, you may not have the chance to negotiate. Submit your highest and best offer to have a real chance in obtaining the property

3. Not Getting an Inspection – When buying a home, you are responsible for all maintenance when you close the deal and walk away with the keys. It is always advised to have an inspector look for things you cannot see – latent defects. Plumbing, termite damage and a substandard structure are some items that will be revealed in an engineer’s report. As a side note, when buying a Co-Op, the complex is responsible for these and other items, so you are protected. An inspection may still be ordered, but it’s rare.

4. Failing to Have an “Out” – You should make sure your attorney has clauses in the contract that will allow you an “out.” For example, a clause that states if the inspection comes back with material defects and the seller fails to address them, the buyer can rescind the offer. You don’t want to be stuck with a headache after you walk away from the closing table.

Do your research when you are ready to consider buying a home. There is substantial planning involved, and you want to make sure you get the most for your money. The Internet is a very useful tool. Use it or contact a Realtor for assistance.

By the way, I’m a Realtor!

www.austintherealtor.com

Happy Shopping!

-Austin

16 comments:

Ed said...

top home buying mistake- dont buy on. the mortgage is too damn high!

Stef said...

You beat Annamaria :)

After his renting vs. buying blog, I agree...it seems like owning a home nowadays is too damn expensive.

Ask me again if I hit the lotto what I think. Until then, I think rent will do me just fine.

Janice said...

I think single people with no kids should rent, and married people with kids should buy. At least in NYC anyway. If you don't need much space, renting is better if you ask me. Personally, I hate seeing people live in a 2 bedroom apartment with 5 kids and a damn dog. I understand they may not be able to afford to buy a home, but at least RENT a home if you can.

Unless you make a grip, owning miight not be smart depending on the city you live in.

Powerz the Realtor said...

There are pros and cons to both renting and owning. It's tough to generalize. I have a friend that's single and no kids and bought a home because he has so few expenses, the mortgage is not a problem. I know married folks with kids with horrible credit and too much debt when renting is their only option.

Everyone case is different so stick to what works for you!

Ed has a good point. If you cannot afford the mortgage, don't do it. If you have to decide between bread and mortgage, you are not in a good situation.

Serena W. said...

Austin I think you need a show on HGTV! Your advice is great and on time! I agree with Ed as well. Just because you can get approved for the mortgage doesn't mean you can afford it. I was just having a convo with a close friend of mine about her renting drama (unfortunately there is no written lease in place) :(

I'm going to keep renting, I spoke with my property manager this weekend and prayerfully the problems in regards to the horrible floors and noise reduction issues will be resolved SOON!

See if I was a home owner I would have to fix the floors! NO BUENO!

Thank you for keeping us informed Austin the Realtor!

A-BUUZZZZZ said...

NO ONE BEATS ME.. And I agree. Austin needs his own show.. LOL :-) Then again I am slightly biased. I think he's the best thing since sliced bread.

Brooke said...

I can afford the mortgage, just not the down payment :-)

Courtney said...

I didn't even think you could buy a house without getting an inspection done. Who would opt not to do that? and why?

Buying a house is so scary to me, because I feel like there are so many things that can go wrong, and unfortunately, you don't know about until you go through and make mistakes - which can be so costly if you're given wrong information or are dealing with shady people. This blog is helpful for those of us who are totally clueless.

I'll keep renting for now :)

Anthony Otero said...

As someone who just sold his damn house and is renting...

it was a great relief to get that house off my back. made too many mistakes, just be sure a house is what you really want.

As Tyler Durden said... The things you own...end up owning you...

Stef said...

Good one Ant!!!

Anonymous said...

As a housing professional I would concur with much of the advice given with an emphasis on individual circumstances. There are a multitude of resources available including housing agencies, housing counselors and most importantly down payment and closing cost assistance.

The biggest challenge most will face is coming up with a significant down payment especially in light of today's credit market. Housing agencies help you to identify those programs and resources to help overcome that obstacle. The family of five for instance would qualify for assistance based on income(not provided but assuming area median income) and family size.

Depending on your part of the country grants of 20k and beyond maybe available. You may also combine funding sources, so yes education is the key.

First time homebuyer courses are available via your local HUD housing counseling agency. Lastly, homeownership is not for everyone. However if you are savvy, you can take advantage of the best rates you will see in your lifetime. One of the fundamental steps to building wealth is saving. Consider the purchase of a home as an investment vehicle. This is one major advantage to renting. Equity.

Rickey

Brooke said...

I should have you do a guest blog for me one day Rickey! :-)

By the way, it's Father's Day this weekend - any guest daddy bloggers for me? :-)

David from gethomeloans.co.za said...

Purchasing a property would be one of the important decisions you make in your life and you don’t want to fall into a trap of buying a home that isn’t within your budget range. Before you fill out any paperwork or talk to the bank, determine the amount of loan that you can afford to pay back. If your mortgage payments are going up faster than your income, you're just going to rack up a bigger debt.

AML said...

Yes, as a buyer, I do agree that having an honest self evaluation on the value of the house, the style of the house, what will be the amenities that I really want before I go out there and go on looking for the condo that would suit me. Research on the market and the trends on a particular market is important. Thanks for the info!

Milliscent Morgan said...

All I can say about this page is great in information when it comes on home buying Beaumont, so it could be better to keep on posting!

Kathleen Salazar said...

“Failing to Find Financing First”. Determining one’s financial capability is the way to start your purchase for a home. In that way, the buyer would be able to set price limitations, and her possible choices already. Truth be told, the financial status of a buyer would determine everything he/she is capable of in purchasing a house. Also, asking for other’s (either a realtor or a lawyer) could also be a big help in making good decisions in buying a house.

Kathleen Salazar

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