7 Buyer Traps & how to avoid them
No
matter how you look at it, buying a home is a major investment.
But for many homebuyers, it can be an even more expensive process
than it needs to be because many fall prey to at least a few of
the many common and costly mistakes which trap them in to either:
Paying too much for the home they
want
Losing their dream home to another buyer,
or
buying the wrong home for their
needs.
1.
Bidding Blind
What price should
you offer when you bid on a home? Is the seller's asking
price too high, or does it represent a terrific deal? If you
fail to research the market in order to understand what comparable
homes are selling for, making your offer would be like bidding
blind. Without this knowledge of market value, you could
easily bid too much, or fail to make a competitive offer at all on
an excellent value.
2. Not getting Mortgage Pre-Approval
Pre-Approval is
fast, easy, and FREE.
This Pre-Approval can mean the difference of someone accepting
your offer, or losing your dream home to someone who does have a
Pre-Approval. (Note: Pre-Qualification is not the same
as Pre-Approval. Pre-Quals are very basic and do not
guarantee a buyer's ability to purchase. Contact one of the
lenders to the right to obtain a Pre-Approval.
3. Unclear Title
Make sure very
early in the buying process that you will own your new home free
and clear from encumbrances by having a title search completed.
The last thing you want to discover when you're in the backstretch
of a transaction is that there are encumbrances on the property
such as tax liens, undisclosed owners, easements, leases or the
like.
4. Undisclosed Fix-ups
Don't expect every
seller to own up to every physical detail that will need to be
attended to. Both you and the seller are out to maximize
your investment. Ensure that you conduct a thorough
inspection of the home early in the process. It is strongly
recommended that you hire a licensed professional to objectively
view the home inside and out, and make the final contract
contingent upon this inspector's report. The inspector
should be able to give you a report of any item that needs to be
fixed with associated, approximate cost.
5. Buying the wrong home
What are you
looking for in a home? A simple enough question, but the
answer can be quite complex. More than one buyer has been
swept up in the emotion and excitement of the buying process only
to find themselves the owner of a home that is either too big or
too small. Take the time upfront to clearly define your
wants and needs. Put it in writing and then use it as a yard
stick with which to measure every home you look at. Be
realistic though!
6. Hidden Costs
Make sure you
identify and uncover all costs - large and small - far enough
ahead of time to act. When a transactions closes , you will
sometimes find extra fees for this or that sneaking through after the
"Sub-Total". Extra fees such as loan disbursement charges,
underwriting fees, etc. Understand these fees in advance and
demand that your lender project total charges for you in writing.
This disclosure is called a "Good Faith Estimate" and must
be provided to you by law. This measure will help you to
avoid hidden charges.
7. Rushing the closing paperwork
Take your time
during your visit to sign the final paperwork. Make sure
this documentation reflects your understanding of the transaction,
and that nothing has been added or subtracted. Is the
interest rate correct? Is everything covered? If you
rush through this process on the day of closing, you may be sorry
later. Take your time when signing!
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