It’s a done deal. You decided you’re ready to purchase a new home. You’ve told your closest family and they’ve congratulated you. Your family and friends have even started to give you design tips.
Although it’s super exciting, many buyers in their excitement end up making mistakes that were easy to avoid. You don’t want to get caught in the whirlwind of what can happen when you buy a home without being locked with the knowledge you need to make the best choice for you.
No matter if you are a first-time home buyer, looking to downsize, or moving into your dream home here are six mistakes to avoid when buying a home.
Submitting offers with just a pre-qualification
You might be ready to start searching for your brand new home right away. But before you start your home search you want to make sure you’ve gotten pre-approved. It’s simple to hop online and get a pre-qualification.
But if you find a home you absolutely love and you want to put in an offer, you may be at a disadvantage if you only have a pre-qualification and you’re not pre-approved for mortgage. Yes, there IS a difference!
When you have a pre-approval you’re proving to the homeowner that you’re serious about purchasing a home. A pre-approval letter creates a much stronger buyer package in the eyes of the seller and their agent. It is more involved and includes further verification and review by the mortgage lender.
When getting your pre-approval make sure to talk to an experienced professional. You want to make sure you’re getting the best deal that aligns with your financial future. Don’t forget to talk to your lender about private mortgage insurance (PMI), different loan types, and other relative costs of the mortgage. Don’t be afraid to ask about the benefits of an adjustable mortgage over a fixed rate. Many homeowners only keep a home or a mortgage for a few years, so opting for an ARM (Adjustible Rate Mortgage) could save you some serious interest.
Choosing to skip out on using a real estate agent
As much of the home buying process has moved online, it’s easier than ever to browse for your next home. However, once you’re ready to tour homes and present an offer, make sure to have a real estate agent help you with the remainder home-buying process.
A top real estate agent in the Roseville real estate market can help you do the following:
- Negotiate the best price and terms for the property
- Get the correct contingencies in place to make sure you have enough time to evaluate the property
- Help you successfully negotiate any necessary repairs that arise
- Get immediate access to the multiple listing service so they can keep an eye out on properties that fit your criteria as soon as they come on the market.
Don’t worry if you think you don’t have the money to pay for a real estate agent. It’s often the seller who pays for the buyer’s agents’ commission so it’s a win-win for everyone!
Quality real estate agents have a vested interest in your success for 2 reasons. First, their financial compensation is tied to a successful outcome for their clients. If you dont successfully close on a home, we dont get paid. Second, ensuring clients are happy is the best way to build a long term successful business. Our goal is to make sure you’re happy and get a great home that you can love for years to come. Verify the quality of your agent with online reviews, and a general overview of their experience and production.
Buying big ticket items before you finished closing
You have been searching for a while and you finally find the home of your dreams. You can already see yourself posting that picture on Facebook about your new home, moving boxes packed since you are ready to move into your new place, and throwing your housewarming party when you and all your friends pop the champagne to celebrate your new home.
You are so excited that you want to start furnishing your new place. Maybe you start touring home furnishing stores and pricing out online.
Unfortunately, taking on any major purchases before you seal the deal and signed and your properties close escrow is the easiest way for your funding to fall through. Many buyers go searching for that perfect bedroom set, new fridge or washing machine for their new home out of excitement.
However, the worst thing you can do is finance big ticket items before your house closes escrow. If you want to start thinking about how you are going to furnish your home, start putting together your wish list. Just don’t make any major purchases until owning the home is a done deal!
Forgetting to consider the resale value
You might have fallen in love with the home of your dreams while house hunting for your perfect place. But, before you fall head over heels, it is important to consider the resale value. What will your home sell for after you buy it?
No matter how much you love that home, situations can change and you do not want to find you have overpaid for a property you can not resell. If you are not sure how to calculate the resale value your agent should be able to help you with this. If you’re financing the home, your lender will also require an appraisal to be completed. An appraisal is an opinion of the current value of the home.
Typically, you request an appraisal when you are putting in an offer on the property. Either way make sure you talk to your agent about this. An agent that has your best interest in mind is going to think about the resale value even if you plan to stay there forever.
A few other resale issues could be location specific. Are you in an excellent school district? Does the home back up to a busy street, or to an open space? What about high voltage lines? These are all things that can impact resale value for better or worse.
Not using walk away power
It can be easy to fall in love with a home when you’re viewing it.
But sometimes what seems like the perfect picture home turns out to be lipstick on a pig. if your dream property turns into a bad deal with bad terms don’t be afraid to walk away.
You do not want to be stuck in a property that is not setting you up for success in your financial future. No matter how beautiful the home is being stuck in a home you can not afford steals yours and your family’s goals away from you.
To help mitigate this, before you start looking for homes decide what you are and are not willing to spend. Then, discuss this with your agent. Make sure to decide what you are willing to spend on closing costs, repairs and find out any other fees you might need to know about from your agent.
Once you know your number stick to it! And don’t let your emotions lead you to making a bad financial decision.
Deciding on your financial goals
Before you start looking for your home, you need to take into account your financial goals.
Homeownership is still an American Dream for many, and being able to buy a home in Roseville could mean you and your families forever home.
Remember to think about your financial future before you take on a mortgage. It is important to decide where you want to be in the future financially so that you know you have committed to a monthly payment you can afford.
If you find that the type of home and the lifestyle you wanted do not fit reality you can consider choosing different areas in which to live. Even if you want to find a luxury property in Granite Bay, but you feel comfortable with a budget that allows you to live in a nice home in West Park or Woodcreek, choose to be open to new possibilities.
With some slight tweaks, you may be able to turn your second choice home into that forever home.
Buying a home can feel scary, but with the right steps you can make sure to avoid these costly mistakes. If you are considering buying a home the best step you can take is to get help from a professional in your area. Talking to a realtor can save you thousands of dollars in the in the long run and make sure your home’s perfect for you, your family and your wallet.