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8 Mistakes to Avoid When Buying a Home
 

 

You have secured your down payment, you have been well advised about the market by your Lux-RE-Homes Real Estate Consultant, and you are now empowered to buy a home to live in or as in investment.  The process of buying a new home requires patience, and will require a fair amount of your involvement, input and cooperation to assure as successful close. 

 

Use the following list as a guide for the most common mistakes you can easily avoid.

 

  1. Searching for houses without getting pre-approved by a lender:

 

Do not mistake pre-approval by a lender with pre-qualification.  Pre-qualification, the first step toward being pre-approved, will point you in the right direction, giving you an idea of the price range of houses you can comfortably afford.  Pre-approval, however, means you become a cash buyer, making negotiations with the seller much easier. 

 

  1. Allowing “first impressions” to overly influence your decision:

 

The first impression of a home has been cited as the single most influential factor guiding many purchasers’ choice to buy.  Make a conscious decision beforehand to examine a home as objectively as you can.  Don’t let the current owners’ style or lifestyle sway your judgment.  Beneath unfavorable décor or poor showing condition many homes need to be looked at with an optimistic eye. Additionally, try to also look beyond the 'window dressing' of a beautifully staged furnished home, of which the contents might not be coming as part of the purchase and focus more closely on the space. 
 
 
  1. Failing to have the home inspected before you buy:

 

Buying a home is a major financial decision that is often made after having spent very little time on the property itself.  A home inspection performed by a competent company will help you enter the negotiation process with eyes wide open, offering you added reassurance that the choice you’re making is a sound one, or alerting you to underlying problems that could cost you significant money in both the short and long-run.  Upon your request, we will provide you with a list of suggested home inspection companies* for you to consider and will ensure the appropriate clause is entered into your contract.
 
*We have no affiliation nor to we have any financial tie or benefit to any 3rd party service firm we recommend.

 

  1. Not knowing and understanding your rights and obligations as listed in the Offer to Purchase:

 Make it a priority to know your rights and obligations inside and out.  A lack of understanding about your obligations may can lead to costly mistakes. We also suggest that you consult your Financial and Legal professionals to take an active role in the process. With their assistance, ensure you thoroughly understand every component of the contract, and are able to fulfill your contractual obligations.

 

  1. Making an offer based on the asking price, not the market value: 
  
Ask your Realtor for the comparable property data, and to provide an analysis of the pricing approach as related to other properties for sale in the market. This will provide you with the information necessary to gauge the market value of a home, and will help you avoid over-paying.  What have other similar homes sold for in the area and how long were they on the market?  What is the difference between their asking and selling prices?  Is the home you’re looking at under-priced, over-priced, or fair value? 
 
 
 
 
 Failing to familiarize yourself with the neighborhood before buying:

 

Check out the neighborhood you’re considering, and ask around.  What amenities does the area have to offer?  Are there schools, churches, parks, or grocery stores within reach?  Consider visiting schools in the area if you have children.  How will you be affected by a new commute to work?  Are there infrastructure projects in development?  All of these factors will influence the way you experience your new home, so ensure you’re well-acquainted with the surrounding area before purchasing.

 

  1. Not looking for home insurance until you are about to move:

 

If you wait until the last minute, you’ll be rushed to find an insurance policy that’s the ideal fit for you.  Make sure you give yourself enough time to shop around in order to get the best deal.

 

  1. Not recognizing different styles and strategies of negotiation:

 

Many buyers think that the way to negotiate their way to a fair price is by offering low.  However, in reality this strategy may actually result in the seller becoming more inflexible, polarizing negotiations.  We will employ research to determine the motivation levels of the seller, and financial implications that may set the framework for a successful and well educated negotiation. This is one of key skill sets that Lux-RE-Homes agents employ, in effort to make the outcome of your purchase as beneficial as possible.