These five home buyer mistakes, commonly make by first-time buyers, can cost you thousands of dollars, or even cause you to lose the house you love! Don’t make these home buyer mistakes when you’re in the market to purchase a house. These real estate tips can save you thousands of dollars. Be sure to download my free home buyer’s guide, here, for even more helpful advice!
Don’t Make These Mistakes
- Not getting pre-approved. Of all home buyer mistakes, this is a common one because people can be reluctant to “get serious” before they’ve found a home that is worthy. Relying on general website information and online financial calculators will not cut it. You won’t know you’re actually qualified for purchasing if you don’t speak with a lender. Without speaking to lender, you won’t know if there are any things you could do to improve your credit and qualify for a better interest rate, which would save you a boatload over time. If you’re not pre-approved a seller is not going to take your offer seriously and you will not be able to compete with other serious (qualified) buyers in the market who may be interested in the same home you are. Period.
- Messing up your DTI—debt to income ratio. If you’ve been working with a lender and have been pre-approved up to a certain amount, that number is generally based upon your credit score, income and debt. Taking on new debt, for instance, buying a new car, boat, furniture for your new house, opening up new store credit…all those things can throw off your DTI and potentially cause your lender to have to pull the plug on your home purchase. Always talk to your lender before making any large purchases and wait until you have closed on the loan and are holding those keys in your hand.
- Internet Lenders. It has been my experience that local lenders beat internet lenders hands down all day, every day. Internet lenders may advertise an attractive interest rate, have catchy advertising, and you may never have to actually talk to a real human being…if you’re adverse to that sort of thing…but they’ll get you with closing costs, hidden fees, and all kinds of hoopla that can make actually closing on the property difficult. Local lenders have very competitive rates, low fees, they have a vested local interest in seeing the transaction through to closing, they know about area-specific incentives that can help you with your home purchase, and they will help you overcome any hurdles you may encounter along the way.
- Not committing to a Realtor®. I know, I know. Some agents can seem like pushy salesmen. We are not all like that. Maybe you think it would just be easier to look online and call the listing agent if you’re interested. Well, when you do that, keep in mind the agent is working for the seller, not you, and if you were to decide to write an offer, the agent would be in a state of dual agency. You can learn more about dual agency here. When you commit to working with a Realtor®, if you choose carefully, that agent will work like a bloodhound to find you want you want. Did you know that a significant number of homes are sold before they are on the open market? The reason for that is that some agents hold pocket listings, also known as private listings, for a while before they go live on the MLS. If your agent is well-connected, he or she may know about some of these opportunities. Guess what happens during the time from when an agent takes on a new listing and it is required to be on the MLS? A bunch of behind-the-scenes chatter between agents and showings. If you want in on this behind-the-curtains action, you need a well-connected Realtor®.
- Looking for a unicorn. There is no such thing as a perfect house. That insta-perfect house you’ve been looking for? Chances are it does not exist, or it is way over budget. Focus on finding a home in the right location with the basics of what you need, and don’t sweat the cosmetic stuff like paint, flooring, dated light fixtures, etc. I tell my buyer clients about the 80% rule. When you’ve found a house that is 80% of what you want, 10% of what you can change and 10% of what you can live with, you’ve found a really good house! It’s ok to take your time and learn about the market, but if you’ve been looking for a while and nothing is a strong possibility, it is likely that either your expectations or your budget needs some adjustment.
Tips for Home Buyers
For even more real estate tips for home buyers, contact me and I will personally help you navigate the real estate waters. If you’re looking for a home in a different area than what I service, I have an extensive referral network, and can refer you to a Realtor® who would be happy to help you with a high level of skill.