Buying a home can be a fulfilling and exciting experience. With emotions running high, it is often times easy for a home buyer to skip crucial steps and make costly mistakes.
The following are three of the most common mistakes that home buyers make when purchasing a home:
Home Buyer Mistake #1: Low-balling a home seller with a ridiculously low and poorly priced offer.
When you finally find the property that you want, don’t play games. Work with your real estate agent and devise a reasonable offer based on available data – usually the recent sales of similar homes in the area.
It is common for some home buyers to believe that taking their time and making a seller “sweat” is a fair strategy to get the best possible home price. Don’t be so foolish! More often than not there are several others interested in buying the same home. When you find the home you want, go after it with full focus to ensure that you get it before it’s gone.
Another helpful tip is to not make too low of an initial offer, or ask for excessive repairs as a concession. Again, there are others looking at the same home and in the case of multiple offers, the seller will usually choose the reasonable one.
Home Buyer Mistake #2: Not actually reading through the entire real estate contract before signing it.
To be sure, when you sign your name on a real estate contract, you are committing yourself and resources to a large financial obligation. Although it is common sense to always read and understand all of the terms and conditions of any agreement, sadly many home buyers do not.
The best idea is to have your real estate agent go over your contracts with you, section by section to ensure that you understand what you are signing. Remember, real estate contracts are legally binding, it’s vitally important that you uncover any potential issues prior to signing.
Home Buyer Mistake #3: Spending too much money on a new home purchase.
Your home loan pre-approval amount should act as a guide – demonstrating what you could possibly pay for a monthly home payment if you maxed out your finances. Your loan pre-approval should not be the actual home price that you buy at.
The reason is simple, buying a home at the top of your price range may leave you “house poor.” (Which basically means you may be able to make the monthly mortgage payment and recurring expenses, but you will likely have no finances left over for recreation and other projects.
It is wise to remain within your comfortable payment range, instead of buying at the top of your approval level. Adhering to this train of thought, you should still have sufficient money left over each month to cover other expenses.
By consulting a local real estate professional, and avoiding these three common home buying mistakes, many home buyers (including you) can avoid the anguish and stress associated with the risky side of the home buying experience.