Buying a new home is an important life event and a considerable investment, and we all know that such a purchase will eventually benefit the buyer one way or another. However, in many cases, it can become a heavy and lengthy process that will cost buyers more than what they originally expected. If a buyer does not pay careful attention, they may fall into the most common and expensive traps, and end up either paying excessive amounts of money for the home they need, losing their desired home to another buyer, or purchasing a home that does not correspond to the criteria they originally established.Approaching the process of buying a home in a judicious way can help you avoid these traps. It will not only allow you to cut
Approaching the process of buying a home in a judicious way can help you avoid these traps. It will not only allow you to cut expenses, but also to have the guarantee that the house you will buy will be the best house for you.
Here are some crucial insights that focus on 9 main and most expensive homebuyer traps, how to recognize them and how to make sure you do not fall for them.
1. Bidding without investigating
How will you know how high or how low you should bid on your future home? How do you know if the seller is trying to fool you or if he or she offering you a deal you cannot refuse? If you forget to do your homework and do not investigate the market in order to understand the value of comparable homes out there, you might as well just bid randomly. Without previous understanding of the market value, you will be more likely to overestimate the value of the house you are trying to purchase, or even miss out on the opportunity to offer an excellent bid for the value of the home.
2. Buying a home that doesn’t fit your needs
What defines your dream home? A legitimate and simple question, yet it may be very difficult to answer. It is very common for buyers to get caught in the excitement and to be overwhelmed by the purchase. When this happens, they often lose their focus and end up becoming owners of a house that is either too big or too small for them, and that does not fit their needs. After the purchase, they realize that the house is either too far from work, or that they now need to take care of quite a few fixes for which they have no motivation to deal with now that the excitement is gone. Make sure you allow some time to define what you are really looking for in a home. Take notes and use what you have written down as the basic criteria that will help you assess the potential of every house you visit.
3. Title Issues
Before going any further, you want to make sure that you will become the legal owner of your new home without any obstacles. You don’t want to be surprised if you encounter any issues such as tax liens, undisclosed owners, easements, or leases.
4. Incorrect Survey
When you are ready to negotiate, make sure that your offer includes a request for an updated property survey that includes your future home’s boundaries. If the survey is not up-to-date, you will not be able to obtain clear information on any structural changes the house may have gone through. This can be, for example, any additions to the house, a new swimming pool, a neighbor’s new fence which is extending a boundary line, etc.
5. Not hiring a home inspector
Not every seller will disclose in detail everything that needs to be fixed in the house. Both parties are trying to get the most out of this investment. Make sure that you get the house inspected as early as possible in the process, and that you hire an independent inspector that will deliver an objective report containing any issues the home may have. This will allow you to obtain a final contract that reflects a thorough inspection, as the inspector should be able to estimate any costs related to any flaws and items that will need to be fixed.
6. Not Getting a Pre-approval for a Mortgage
Pre-approval can be done in only a few minutes, and it’s completely free. Once your mortgage is pre-approved, you will be able to shop for your new home with a clear mind, not only because you will know exactly what you can afford, but also because you will know that the money you need will be available to buy your dream home.
7. Contract Misses
What if the seller doesn’t respect the contract and fails to repair the items as agreed? Make sure you also agree on the equivalent value for each of these repairs, and that you review them one by one. Prepare a list of these items and engage to secure an amount in case of non-compliance.
8. Hidden Costs
Make sure that all costs are established and uncovered early in the process, no matter how small or large. Once you get to closing a deal, you may be surprised to find out about extra fees right below the subtotal line, such as loan disbursement charges, underwriting fees, etc. Make sure you are made aware of these charges beforehand, by requesting the total of the extra fees in writing.
9. Rushing at closing
The excitement of finally signing for your new home may end up playing tricks on you. Take all the time you need during the closing of the contract, and request all the paperwork at least a day before you sign. Make sure that the documents are written clearly and without any ambiguity, that it reflects your understanding of what you are about to sign, and that nothing has been added or removed. You want to make sure that everything is covered and that the numbers are right. If you rush when it’s time to close the transaction, you may find yourself having to compromise the terms of the contract or even the financing.
Verify if your broker has access to a buyer profile database or a house-hunting service, which will assist you in finding the right home for you. This type of support will match your criteria with all available homes on the market and provide you with printed information on an on-going basis. Such programs can facilitate your search by presenting you with homes that match your criteria and budget, in order to finally find the perfect home for you.
