It’s no secret that buying a home is one of the most important purchases that you will make in your lifetime. When making such a significant decision, it’s critical to research the best home buying strategies out there.
But how do you avoid making potentially huge mistakes? Here’s a list of what NOT to do before buying a house.
Waiting to Get a Mortgage
When starting the home buying process, many buyers think that they should find their dream house first and then work on the mortgage second. In reality, it’s smarter to get a pre-approval before you start touring homes. That way, you’ll know exactly what you can afford.
Having a prequalification letter could give you an edge over other buyers. If the home you want has other offers that have to wait on financing, yours will be more attractive if you are already set with a pre-approval.
Not Knowing the Lingo
Do you know what escrow is? If you’ve never heard of earnest money, and don’t know the difference between a buyer’s agent and a listing agent, it might be time to brush up on your real estate terminology.
Familiarizing yourself with key terms before you start your search will make the process a whole lot easier.
Forgetting to Research the Market
You’ve found a great neighborhood for your new house hunt. But how much do you really know about the pricing in that location? Pro tip: do a comparative market analysis.
This is commonly used by sellers to establish a fair listing price for their home. But when utilized by a buyer, it gives the advantage of understanding the worth of the home vs. other comparables in the area. By doing this research beforehand, you could save a lot of money by having a better idea of a good offering price.
Not Negotiating the Contract
Congrats, you’ve gotten to the contract stage of the game! But before you sign on the dotted line, make sure to read it carefully and see if you’d like any changes made. No contract is set in stone, especially in the world of real estate.
Have your real estate broker negotiate on your behalf for any points that you are not comfortable with. This can be anything from making the offer subject to financing or asking the current owner to include all of the appliances. Don’t be afraid to ask for modifications.
Failing to Get a Home Inspection
Houses can hide a wealth of problems not visible to the average human eye. So how do you troubleshoot when you are not sure what to look for? That’s where a home inspector comes in.
A good home inspector will give the house a thorough check-up, room by room, and help identify any existing or potential problems. Also, don’t ever trust a home inspection done before the house went on the market. Be sure to hire your own inspector!
Skipping Radon Testing
There are many areas in the country that have high radon levels. If you’re not familiar with radon, it is a naturally occurring gas that passes from the soil into the home, potentially causing serious health problems. Did you know that one in six homes in New York has high radon levels?
With that in mind, it’s important to get the results of a radon test before closing. Many sellers will provide this information, but if not, be sure to have a test done. You don’t want any surprises after you move in.
Not Having Enough Saved for Emergencies
When buying a house, most people understand that they should save enough for a down payment. But what about other costs?
Closing costs can be from 1.5 to 4% of the purchase price. Plus, the pre-sale house inspection, moving costs, taxes, and insurance can really add up. But it’s equally important to reserve some money in case an emergency comes up after you get the keys to your new home.
Ignoring the Seller Disclosure Statement
Once you’re in contract, the sellers are required to provide a property condition disclosure form or a seller disclosure statement. This can include everything from pest infestations to a past death on the property. It’s important to read through this carefully, as it could highlight potential current or future issues with the house.
Be sure to check your local and state laws about what should be disclosed, as they vary from place to place. For example, in New York State, sellers can opt to pay $500 to the purchaser instead of providing that form. Even if that’s the case, it’s recommended to forgo the cash for the report.
Using the Seller’s Agent
One of the most common mistakes in real estate is having unrepresented buyers using the seller’s agent, instead of finding their own. Many house-seekers figure that it’s all the same and that one agent for everyone will do. Don’t fall into this trap!
This may sound obvious, but remember that the seller’s agent has the seller’s best interests at heart. So take the time to find a dedicated agent who understands your needs and priorities.
One Final Tip on What Not to Do When Buying a House
Don’t rush the process! While it’s easy to get caught up in the excitement of the hunt, be sure to take the time that you need to do your research. This is key to avoid buyer’s remorse on such a large purchase.
Focus on the facts, not feelings. While it’s important to find a home that feels right, don’t forget to make sure that it’s a fit for both your budget and lifestyle, too. If you’ve done your homework in advance, you can feel more confident that your investment will have a solid foundation.
Ready to Take the First Step?
You don’t need to do it on your own! Licensed Real Estate Brokers can help guide you in the process and keep you from making costly errors when purchasing a property.
Contact us to start your own incredible journey to the destination of homeownership.