To the great relief of many people, both inside and outside the real estate industry, it seems like the worst part of the depressed real estate market may be behind us. It's precarious business trying to forecast market changes (see below) but at least in some areas of the USA it does appear that buyers are beginning to emerge from hibernation. If you are looking into purchasing a home, here are the top ten mistakes that you should steer clear of before closing the deal. 1. Not Getting a Loan Pre-approval Getting pre-approval for a loan is an important first step for potential buyers. Obtaining a mortgage pre-approval will give you a much better idea of the total amount you can safely borrow. Having a pre-approval letter also shows that you are serious about buying. Most sellers with worthwhile properties won't bother to consider an offer unless it is accompanied by confirmation of pre-approval. In addition, should any problems with your credit worthiness come up it is better to learn about them early, when you still have time to take action to correct them. Discovering a credit glitch after you have already agreed to a home purchase can be quite upsetting. 2. Not Hiring a Buyer's Agent Unless other plans are made, with nearly all full service real estate companies, the buyer's agent works for you at no cost to you. His or her compensation is paid by the seller's representative after the sale is finalized. Consequently, it is in your best interest to hire your own representation - a buyer's agent - rather than working with the seller's agent. The seller's agent is obligated by law to act in the seller's best interest, not yours. By engaging a buyer's agent you can level the playing field since a buyer's agent is obligated to serving in your best interest. 3. Working with the Wrong Real Estate Agent Prior to selecting a buyer's agent, you should meet with several different agents. Get the names of previous clients so you can check references. Do not limit yourself to agents with large brand name offices or so called "million-dollar" agents. Also, before hiring a friend or family member who is an agent, remember that if you are displeased with the service being provided, it's considerably easier to drop an agent who is a "stranger". 4. Not Realizing the Length of Time the Process Takes Buyers, and sellers, sometimes believe that the process of buying property is shorter than it really is. There are a myriad of things that can cause delays. Sellers can be slow on formally accepting an offer, you may have trouble selling your old property, financing may be delayed, repairs may need to be completed, problems with getting a clear title to the property may arise, etc. Murphy's Law always seems to surface when trying to finalize a deal quickly. Make sure to allow at least eight to twelve weeks to complete the sale. 5. Presuming the Appraisal and/or the Tax Assessment Are Equal to the Actual Value. Appraisals and tax assessments are designed to be objective approximatioins of value. But, different appraisers can arrive at considerably different results. Buyers should have their agent conduct a comparative market analysis (CMA) to get a better idea of the home’s current market value prior to making an offer to purchase. 6. Trying to Time the Rising and Falling of the Real Estate Market Attempting to time a purchase with when the market has hit it's low point is just about impossible. I would be a very wealthy man if I were able to do so! Both buyers and sellers should know that a practical real estate investment is nearly always a long-term venture. 7. Ignoring the Facts When Looking for Your Dream Home When buying a home, if you only follow your heart and not your head, you will most likely be in for some nasty surprises. That beautiful home may look like your dream home, but make sure you think about everything involved. Think about such everyday issues as the effect a large mortgage will have on your resources, commuting times, the quality of local schools and shopping facilities, the cost of property taxes and homeowner association and other quality-of-life matters of home ownership. That wonderful home may not be worth the negative issues it creates foryou and your family. 8. Not Remembering That Timing Is Everything As you can probably imagine, paying double mortgage payments can be incredibly difficult to deal with. When thinking about selling your current home and purchasing another, keep in mind that the sale of your current home is the more critical of the two transactions. If you would be unable to make payments on two loans, If at all possible, try to ensure the sale of your old home before committing to buy a new one. 9. Not Reading the Contract. Don't forget that a purchase contract is a legally binding committment. Failing to understandwhat you’re committing to can be a major mistake. Review the agreement cautiously prior to signing and get clarification if there is something you are uncertain about. Don't be afraid to have your attorney review it,if you wish. Make sure it contains everything you think it should, including which party is paying for what. Verbal agreements should be included, in writing, in the contract. Make sure that your agent takes an activerole in the writing and negotiation of the contract. Hurrying throughthis step can add delays and cause financial and emotional pain. 10. Not Conducting a Criminal Search for the New Location. Agents in most parts of the country are not required to tell buyers that there is a sex offender or other illegal activity in the neighborhood. Inquire at the local police department or sheriff’s office to learn how to access local sex offender and related criminal databases. In addition, the internet has made this research much easierin recent years. There are many online resources for discovering this information. Visit the website www.backgroundcheckpoint.com for a list of a number of of these important resources.
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If you are looking into buying a home, here are the top ten potential problems that you should steer clear of before committing to a purchase.
Jim Navary has been a freelance writer and researcher for over thirty years covering a broad range of topics. He is also a licensed real estate salesperson in the Commonwealth of Virginia featuring Prince George VA real estate and Fort Lee VA homes for sale.
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