The 12 Most Common Mistakes New Home Buyers Make …and How to Avoid Them

 

"It’s much easier to cross a mine field when you know where
the mines are. By knowing the common mistakes that most
people make when buying a home you can save yourself time,
money and a great deal of frustration."

 

Dear Neighbor,

For most people buying a home is the largest investment they will ever make. Unfortunately many homebuyers go into the process without learning about the process. This often leads the purchase being more expensive and more difficult than it needs to be. By learning from other people’s experience you can avoid…

• paying too much for the home you want, or
• losing the opportunity to own your dream home or,
• buying a home with lots of problems or,
• (worse) buying the wrong home .

A systematic approach to the home-buying process can help you steer clear of these common mistakes, allowing you to not only cut costs and save time, but also make the process a more pleasant experience.
 

12 Home Buyer Mistakes To Avoid

This important report discusses the 12 most common and costly homebuyer mistakes and what you can do to avoid them:

1. Not Checking Out Each Area Thoroughly

If you are planning on buying a house in an area that you have lived in for a long time this may not be an issue. But if you are new to the area it will be well worth your while to ask people you trust about the different areas you are interested in. When you narrow it down to two or three choices, walk the neighborhoods, talk with people you meet, visit community organizations, schools, places of worship, etc.
and make sure this is area you will be comfortable in.

2. Not Verifying Value’s

What price should you offer when you make an offer on a home? Is the seller asking too much or is this a bargain you should jump on? You will never know for sure until you research the market and look at what comparable homes have recently sold for in that particular neighborhood. This is something your real estate agent can help with. By accessing the local multiple listing service an agent can provide a list of all the homes that have sold in a prescribed area.

Ask your agent to provide a list of all the homes that have sold within the last
three to six months that are the same type of home that you are interested in and close to the same size and age (or at least condition) along with the final selling price of the property (including any known seller concessions). If you will take the time to drive by these properties you will quickly get a feel for values in the area and be better equipped to make a reasonable offer for the property. If you don’t have a real estate agent we would be happy to refer you to one.

3. Not Getting Pre-Approved For a Loan First

This is where most people get the cart before the horse. They get excited about buying a home and start looking around. Before you know it they have hooked up with a real estate agent and are seriously considering different properties. Then they finally ask the question: Can we afford this? Unfortunately the answer is often no and they have to start all over again. And, of course, when they start looking at
lower priced homes their enthusiasm is dampened because they had their hearts set on the nicer homes.

Getting pre-approval not only helps you know what you can afford but it puts you in a stronger negotiating position as well. When the seller and their agent know that your loan is done and just waiting for you to find a property they will be much more interested in your offer and will give your offer more weight against competing offers.

Getting pre-approved is fast, easy and normally free. Most mortgage professionals can obtain written pre-approval for you at no cost and no obligation, and it can all be done quite easily over-the-phone. More than just a verbal approval from your lending institution, a written pre-approval is as good as money in the bank. It entails a completed credit application, and a certificate from the lender which guarantees you a mortgage up to a specific level when you find the home you’re
looking for. Make sure you are dealing with a professional who specializes in residential mortgages. The mortgage industry is extremely complicated with literally hundreds of options and choices. Using an expert can make the difference between getting into the home of your choice or having to rent forever.

4. Taking Your Credit For Granted

Unfortunately you may be reading this report too late to have kept from making this mistake but it is never too late to start improving your credit rating. In the last few years the way lending decisions are made has become much more automated. And the way the decisions are made has changed dramatically. For the most part decisions are made based on certain guidelines and not left up to subjective humans.

This places more and more importance on your credit rating when applying for a loan. How good your credit rating or “scores” are depends on several factors such as: Current credit balances, Amount of current available credit, Late payments (How many, How late, How recent, Type of Account) and recent inquiries about your credit.
 

If you are planning on getting a mortgage loan make sure you are making all of your current payments on time and avoid any unnecessary inquiries into your credit. In other words, don’t go out shopping for a car or new furniture and have sales people all over town running credit checks on you. If you want to have the highest scores possible and therefore qualify for the best rates available it is best to be patient and wait until your loan is done before you go do things that will affect your scores.

5. Not Having a Prioritized List of What Is Important
Many new home buyers will often get swept up in the excitement of
becoming homeowners then after it’s too late they find out that the
home they just purchased does not suit their needs. Before even
beginning the process clearly define your wants and needs. Put the
list in writing and prioritize it in order of importance. Measure each
property you look at to determine how well it matches your list. Here is a list of some items to take into consideration:

1. Size of home: Number of Bedrooms, Baths, Etc.
2. Style: Are stairs or a basement ok? Etc.
3. Type: Single Family, Duplex, Condo, PUD
4. Condition: Does is have to be near perfect or are you willing to do
some repairs in order to get a better price?
5. Location: Type of neighborhood, Proximity to work, schools, etc.


6. Not Checking on Title and Boundary Issues
It’s no fun to get to closing and find out that there is a problem with
the Title to the property. These problems could appear in the form of
undisclosed owners, tax liens, mechanics liens, easements, leases or
other encumbrances. One of the first things that should be done as
soon as you come to an agreement on the purchase of a property is to
order a preliminary title report from a title company. Your real estate
will normally handle this. Make sure you receive a copy and review it.

If there are any parts of the report that you don’t understand, ask
your agent or an employee of the title company to explain. If there
are issues that need to be taken care of make sure that they are
completed before closing and that the Title Company is issuing you a
clean policy of Title Insurance. This Title Insurance Policy will help
protect you from claims that may come along after the fact.
 

It’s even worse when you find out about a problem after closing such
as a problem with your property boundaries. For instance, if your
neighbor discovers that the shed at the back of your property is sitting
partially on their property it’s your problem regardless of whether the
shed was built there by you or a previous owner. Survey’s help you
avoid these types of problems.
 

The dependence on survey’s varies from area to area depending on
how established the neighborhoods and boundary lines are and the
type of legal descriptions that are used. Your agent can give you a
good idea of the necessity of a survey or an update of a previous
survey. However, if there is any question as to the boundary lines of a
property your offer should be made subject to your approval of a
survey by a licensed company.

7. Not Getting a Thorough Inspection
Another valuable tool for avoiding unexpected problems is a
professional inspection done by a licensed home inspection company.
Your offer should also be subject to your approval of just such an
inspection. A professional inspector will objectively inspect the home
inside and out and should be able to give you a report of any item that
needs to be fixed with associated, approximate cost.
No home (even a fairly new home) is perfect. You should not be
alarmed when the inspector suggests minor repairs or maintenance
issues. This is quite normal. Avoiding the large repairs or expenses
(such as termites, radon, mold, lead paint or asbestos) is when the
inspection will more than pay for itself.

8. Not Negotiating Hard Enough on Price
Obviously your ability to negotiate the best price on a property will
vary depending on your current market’s conditions. A buyer’s market
means that there is more supply than demand and therefore buyers
have the upper hand. A seller’s market is just the reverse. Regardless of the market, however, you can usually negotiate a better price if you will follow the steps previously stated. These steps will give you the information and positioning necessary to approach the negotiation process fully prepared. You should also be careful when offering a certain price and terms for the property not to give any indication that you will go higher. This is the time when a poker face is extremely useful and keeping your excitement in check is critical. Just remember that every dollar you save on price will save you 2 ½ to 3 times that amount in mortgage payments.

9. Not Negotiating For Extras
This is another opportunity that is often lost during the negotiation
process. That is the opportunity to save money on items you will need
to buy if you don’t have them (such as a refrigerator, lawn mower,
etc.) or to get goodies you would not normally buy (such as a hot tub
or sauna). Many of these items can be had simply for the asking. Many home sellers don’t want to take the time and effort to have to move the larger items and new. Whether they are or not, it often they are looking for an excuse to buy something can’t hurt to ask. These
types of items make good bargaining chips and the worst they can do
is say no.

10. Not Following Up On Contract Stipulations
When negotiating the purchase of a property there will often be items
(such as repairs, etc.) that the seller agrees to take care of prior to
closing. It is a mistake to simply assume these have been taken care
of and not check on them prior to closing. Make sure to do a final walk-through of the property well before the closing date. Bring along a list of all the items that were agreed to and check them off as you go. It’s not a bad idea during the negotiation process to agree to an amount to be held in escrow at closing if the items are not taken care of. This will give the Seller motivation to make sure they are completed and will avoid delays in closing if they are not.

11. Hidden Expenses
It’s no fun to get to the closing table and find out that the costs of
completing the transaction are higher then you thought. If inspectors,
surveyors, etc. have agreed to be paid at closing make sure you know
what their charges will be and get it in writing. The same is true of your lender. Your lender should be able to provide a detailed estimate in writing of all expenses to expect in originating your new loan. Be sure and bring these items to closing and compare them. No lender can be exact down to the penny in estimating these costs but a good lender should be pretty close.

12. Rushing The Closing or The Escrow Period
Nobody likes surprises when it comes time to close. Moving is one of
the most stressful times in peoples lives so both the Seller and you as
the Buyer are going to be more emotionally “uptight” then normal.
The best way to minimize the stress is to expect some bumps along
the way and give yourself time to deal with these challenges as they
appear. Make sure to set reasonable time frames for items to be
accomplished then hold to your schedule as much as possible.
Ask your lender to have all the documents available for review a day
prior to closing. Check them out carefully to make sure the costs on
the settlement statement are in line with what you expected and that
the terms of the loan (i.e. interest rate, fixed or variable, term, prepayment penalties, etc.) are what you agreed to. This way if you do
find a discrepancy you will be able to deal with it without feeling under
the gun and there will be time to fix it before it becomes a problem.

I hope you have enjoyed this special report. We currently have over 40 creative loan programs to fit your needs. Please contact us at 203-483-0061 to set up your FREE No-Obligation consultation where we will meet to tailor a program to fit your needs and comfort levels for monthly payment and investment.

Sincerely,
Chris Rivers
Chrysalis Funding
150 W. Main Street
Branford, CT 06405

Phone: 203-483-0061

P.S. If you would like to get started now please click the following link or image below to fill out a Free No-Obligation Secure Online Application and we will contact you to schedule a free consultation to help you get the home of your dreams with the best terms available...regardless of your credit!