Home Buying Articles – Six Simple Steps to Ensure a Smooth Home Purchase 2017-10-09T17:07:34+00:00

Avoid the 6 Most Common Home Buying Mistakes

Purchasing a home can be an emotional experience. It is also time-consuming and involves a countless number of details. Some Buyers get caught up in the excitement of buying a new home, and in doing so overlook some critical details. As a result, their home purchase turns into an expensive and frustrating experience. These mistakes generally fall into three categories:

  1. Paying too much for the home.
  2. Losing the home you love to another Buyer.
  3. Buying the wrong home for your needs.

By having a systematic plan in place before beginning your home search, you will be sure to avoid these costly mistakes. Here are some tips and things to consider in order to make the most of your home purchase:

1. Bidding Without
Sufficient Information.
What price do you offer a Seller? Is the Seller’s asking price too high? Is it a deal? Without accurate research on the current market and comparable homes sold, you could make some costly mistakes. Before you make that offer, be sure you have researched the market thoroughly.
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The Mark Fisher Home Team represents home buyers at no charge and will help our clients successfully navigate the home buying process as well as offer an unbiased opinion of the value of the home(s) you may be interested in purchasing based on current market conditions, comparable homes sold, the condition of the home and property, the location of the home and the community. Without knowledge of the market, your offer could be too much, in which case you may overpay for the home, or two low, causing you to lose the home of your dreams to another Buyer.

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2. Buying the Wrong Home.
What do you need and want in a home? Clearly identifying your home needs versus wants will help you hone in on what is most important while searching for the right home for your needs. It will also help you maintain an objective view during the search process and leave you in a better position to negotiate those key items. Sometimes home buyers buy a home that is too large or too small for their needs. Perhaps they didn’t consider the drive to work, the distance to school or the many repairs they will need to tackle. Plan ahead. Use your needs list as a guideline for every home you view.
3. Unclear/Clouded Title.
The home buying process involves a Real Estate Closing Attorney who will research the title to the property you are purchasing to ensure there are no liens, debts, undisclosed owners, encumbrances or easements that may be of concern or prohibit the sale of the property. Title includes the entire collection of rights and obligations attached to the property.
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4. Outdated Property Survey.
Before the purchase is completed, it is recommended that you obtain an updat5d property survey. The surveyor will determine whether the house is within the property borders, whether any structural changes have been made to the property (such as additions to the home), whether there are any encroachments on the property by neighbors (such as a neighbor’s fence extending over your property line) and the extent to which any easements on the property may affect legal title.
5. Not Investing in a
Home Inspection.
For $300-$500 a professional home inspector will conduct a thorough inspection of the home you are contemplating purchasing. A professional home inspection will allow you to properly assess the current condition of the home and negotiate needed repairs with the Seller. A home inspection can also give you an idea of the cost of future repairs.
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You and your agent will want to make sure the Purchase and Sale Agreement is contingent on a Due Diligence Period during which time you are entitled to conduct any inspections of the property you deem necessary, negotiate repairs with the Seller and terminate the contract for any reason whatsoever should the home be in an unacceptable condition and the Seller be unwilling to make or contribute to needed repairs.

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6. Shopping Without
Loan Pre-Approval.
It only takes a few days to get financing pre-approval. When you are shopping for a home, this gives you more power. A seller is more likely to consider an offer from a serious buyer who has been pre-approved for a new loan. If you are self-employed, it is of utmost importance that you get pre-approved before beginning your home search. The number of write-offs you take when filing your taxes can greatly impact the amount of financing you can obtain. Save yourself time and possible disappointment and get pre-approved first.

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6 Simple Steps to Ensure a Smooth Home Purchase

[spacer height=”15″ mobile_hide=”true”] Buying a home can be an emotional, time-consuming and complex process. There area few things that you can do to help make the process go as smooth as possible:

1. Check Your Credit.

Before you apply for a home loan, regardless of your credit, it’s a smart idea to obtain a copy of your credit report from the three major credit bureaus and review the information. If there are errors or things that need to be addressed, it’s easier to address them before you have found a house, than after you have found a house and
are trying to close your loan.

If you know that there are a few blemishes on your credit, let your lender know what they are, why they are there, and why you are still a good credit risk. Lenders look at your credit to determine how likely you will pay back the loan. If you had extenuating circumstances – like a loss of a job or medical bills – let them know so that they understand that it is not likely to happen again in the future.

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2. Get Pre-Approved Before You Begin Your Home Search.

Getting pre-approved means that a lender has reviewed your credit history, verified your assets and employment, and has given preliminary loan approval before you have even found a home to purchase.
As long as the home appraises for at least the purchase price, the loan should close.

Getting pre-approved can give you an advantage over other buyers. Your firm pre-approval makes it easier for you to negotiate on the price of a home and makes your offer much stronger than the buyer who has been merely pre-qualified or who has yet to even speak with a lender.

While getting pre-qualified may sound official, it’s really just getting an idea of what you can afford and carries much less weight with a Seller than a pre-approval. It’s having a person plug in a few numbers that you give them (your monthly income and monthly debt) and then calculating an approximate monthly payment based on these numbers. From this payment, the calculator can then approximate the price-range of a home that you can afford to purchase. No information is verified. Because your assets, income and credit are not verified, a pre-qualification has little value when purchasing a home.[spacer height=”15″ mobile_hide=”true”]

3. Find A Great Buyer’s Agent.

Traditionally real estate agents represent the Seller in a transaction. When you are not working with a Buyer’s Agent, and are therefore unrepresented in the transaction, they are less likely to negotiate the
best price or contingencies for you.

In fact, they are obligated by contract to look out for the best interests of their client—the Seller. On the other hand, a Buyer’s Agent’s fiduciary responsibility (meaning legal duty) is to you—the Buyer. Before working with an agent, establish if they are a Buyer’s Agent or Seller’s Agent. After spending a lot of time with a Realtor, it’s natural to feel like you’re a team and that they are on your side, but if they are not representing you and negotiating on your behalf (with your best interests in mind) then they are not on
your team.

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4. Learn About the Neighborhood.

Often times the house you find may be in a neighborhood that you’re not familiar with, which is ok. It just means that you’ll have to do a little more research. If you find a house that you like, ask for a list of the neighborhood properties that sold in the last year. How does your home rank? Is it at the top of the price range? If so, it might be hard to resell. Is it average or on the low end? If so, great – as the other home prices go up in value, they will pull your home’s value up as well.

Check out the schools – are they sought after?
A good school district means your neighborhood will always be valued by families which is a great reassurance to purchase, not to mention the value-add if you have school-age children.Next, contact the police station and obtain crime statistics? Are they acceptable to you? Sometimes, if they won’t give them to you,
it could be a cause for alarm. Talk to the neighbors. The more people you talk to, the better sense you will get of who makes up the neighborhood and how they will effect your time spent in it. Check out the location of the shopping, police and fire stations, schools, and air traffic overhead. These are all things that might affect your property value or quality of your life.

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5. Protect Yourself.

Ask your Realtor for a copy of the documents you will be asked to sign if you decide to buy the house. Read them ahead of time so that you’ll understand the questions that you will be asked, the things you need to know, and the decisions you will need to make.

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6. Have Reasonable Expectations.

There is a lot of money at stake. No house is perfect. Understanding and remembering these two statements will help diffuse the negotiation stage, the inspection stage and the closing stage.

Emotions are high for both buyers and sellers. – The seller may have loving memories and years of sweat equity in the house. Maybe they are being relocated and don’t want to go. Understanding their motivations for selling will help you appreciate their situation and predicament during these emotional times.

There is a lot of money at stake for all the parties involved (and that includes the realtors) – Just remember that market value (the value of a home) is the price that a willing buyer and a willing seller can agree to. If you can not agree on a price, ask yourself: Is there something you missed? Are there comparables that support the price that they want? Are there motivations that might factor into the price they are demanding? In the end, does it matter? What is the house worth to you today and what do you think you can reasonably sell it for based on the amount of time you plan to spend in it? Think about the answers to those questions before you make your move.

No house is perfect – Always get an inspection. It might be a few hundred dollars, but it’s worth it. It’s the inspector’s job to find any problems with the house that could cost you thousands to repair down the road. Some inspectors have a tendency to over play the importance of their role and the items that they find. Get objective opinions that you trust before making a decision on an inspection report. Likewise, if an inspector says a foundation is cracked but its nothing to worry about – get a second opinion. Ask a handyman for an idea of how much repairs will cost and how complicated they are. The home buying process is an emotional, complex and time-consuming process, but it is worth it. Nothing compares to owning your own home in a neighborhood that you chose.

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