Buyers today, including many first time home buyers, are eager to make an offer on a home before prices continue to increase and interest rates rise. But as I have mentioned several times on this site, buying a home is probably the biggest financial purchase you will ever make. So a buyer must be very careful that this important step is handled correctly and with lots of patience and research. If a buyer makes a mistake, they could very well be stuck with a home they don’t want or, a home they love, but that they are unable to get financing for and close. What are some of the biggest blunders home buyers make? Here are a few we have discovered:
1. Not hiring a professional, trusted real estate agent:
No doubt, you need to hire a professional that you trust and who is looking out for your best interests – not theirs. You want to make sure that you confide in your agent everything that you know about what type of home you want, your financial information and budget, what you can and can’t afford, if you have had money problems in the past that may prevent you from buying and that sort of thing. Why do buyers hesitate in sharing this information?
- Fear of how they will be perceived
- Feel that what they have been through isn’t important
- Think they know all of the answers
- Don’t trust their agent
But keep in mind, real estate agents, especially those that have been in the business a very long time, have seen all kinds of clients with all various issues come and ask for their help in finding a home. Chances are, we have seen just about everything and we are eager to see if we can help you. But we can’t if we don’t share everything that needs to be known. Again, we are representing your best interests and hopefully we can lead you into the right direction and find you a home.
Also, if through the process, you are getting cold feet, or experiencing buyer’s remorse, then by all means, talk to your agent and express your feelings. Again, you won’t be the first client that has done this. There is a good chance that your agent can help you, walk you through the process and determine if you really need to cancel, or you are just having normal anxieties. Also, if you do decide to cancel the deal, your agent can help determine how to get your deposit back.
2. Going on a buying spree just before closing:
Yes….this has happened too many times to count. There are those buyers, who once their offer has been accepted and are pre-approved, feel they can go out and buy a car, or furniture, or charge a vacation to their credit card. The key advice agents can give to their clients is this: Do not buy anything until you have signed on the dotted line and the keys are in your possession. This is especially critical for first-time buyers who have put every last dime into the purchase of their new home. Why is this? Lenders do a final credit check just before closing to see if your ratios are still within a reasonable limit. When a buyer gets the phone call from their lender saying the deal will be cancelled because their financial information has changed, they are shocked! Then they drastically go and find a way to borrow the money from a relative to pay for the car they just purchased. So again, if you are tempted do not buy:
- lawn mowers or yard equipment
- expensive computers and electronics, including televisions.
Even if you think you will be okay, it’s still best to wait.
One client that had zero debt, was faced with the cancellation of her loan when she purchased a car. She didn’t think it would be a problem. She was lucky that her father bailed her out, but she was stunned that she came thisclose to losing her home.
3. Buying a home just to buy a home:
When buying a home, you want to make sure that you have a “wish list” and a “must have” list. You need to figure out what is important to you, and what you can live without. Buyers who buy a home and then later figure out they wanted to live in the suburbs as opposed to the city unfortunately, got caught up in the moment of buying a home. Other buyers who don’t come prepared don’t take into consideration that they really need a home with two bathrooms instead of one. Or that they do care if the master bedroom is on the main floor while their children’s rooms are upstairs. For some buyers, they buy a home simply to buy. They may think they can live with something because they haven’t given it too much thought.
So I always ask buyers to provide a list so we can carefully review, I can ask questions and determine what their needs really are.