Top 10 Home Buyer Mistakes to Avoid
10-Not performing a ‘drive by.’
When you look at houses online, you generally do not see what is next to the house or what is down the block. If you have time, drive by the potential home that you are interested in. If you do not have time, use Google Maps to see the street and what type of properties you are sharing an alley.
9-Not knowing the neighborhood.
Before you buy, get the lay of the land – drop by morning noon and night. Many homebuyers have become completely distraught because they thought they found the perfect home, only to find out the neighborhood wasn’t for them. Drive by the house at all hours of the day to see what’s happening in the neighborhood. Do your regular commute from the house to make sure it is something you can deal with on a daily basis. Find out how far it is to the nearest grocery store and other services. Even if you don’t have kids, research the schools because it affects the value of your home in a very big way. If you buy a house in a good school district versus bad school district even in the same town, the value can be affected as much as 20 percent.
In a hot market, it may make sense to get Under Contract before doing your research. In a market where houses are not selling quickly, you may have some time to do your research before putting in an offer.
8-Missing the 3 essentials of a Home Inspection
Once the home inspection is complete, you are allowed to ask the seller to make some repairs on the home. However, you should not feel obligated to submit every inspection item.
Here are the 3 categories to help filter what you can ask for:
1-HEALTH-Can you get sick by living in your new house? If the answer is YES, you could add an item to the Inspection Objection list. An example of of a health issue can be a high radon reading, mold, or a blocked sewer line.
2-SAFETY-Is there a risk by living in your new home? An example of a safety concern are missing smoke/carbon monoxide detectors, electrical issues, an old furnace that needs to be replaced or a gas leak.
3-STRUCTURAL-Do you notice uneven floors or a roof that needs to be replaced? This could be your chance to ask for a structural item.
7-Not having home sewer scoped.
One aspect of the home inspection that should not be ignored are sewer scopes. Sewer scopes are performed to inspect the integrity of the house sewer that goes from the house to the city main. The sewer scope is performed by a camera(that looks like a microphone) and is inserted from inside the house. Once the camera is inserted into a clean-out or a toilet ring, it is fed until it reaches the city main line. The technician knows that he has reached the city main by using a monitor located at where the technician started. With this monitor, the technician can inspect the sewer pipe for cracks, breaks and offsets. A sewer scoping can cost between $100-200, but is money well spent. For example, to repair or replace a sewer line can cost between $6,000-$14,000. If there is a problem with the sewer, it is good to catch it at the home inspection stage, not when you are hosting your home warming party. Sellers are inclined to repair/replace the sewer line. They also have the option of doing a price reduction or credit at closing of the home purchase.
6-Attempting to find and purchase the perfect home.
To use a baseball analogy, you do not look to hit a grand slam with your first at bat. Unless you have significant savings, you are more than likely going to buy something modest on the side of a 1 br or 2 br house or condo for your first purchase.
Fast forward 5-7 years with the appreciation of your home, it is from this initial purchase that you can trade up to something bigger and better. With this scenario you have two strategies that you can use for your next purchase: sell your property and trade up to your dream home OR use a line of credit and keep your first home as a rental. With the line of credit, you can purchase your dream home.
In a hot real estate market, you could do well for yourself when you sell, but you need to start somewhere.
5-Not having a NEEDS and WANTS list.
Have you ever driven to a new destination without directions or a map? You may end up lost and waste time and energy. Buying real estate without a NEEDS or WANT list can be very similar. By having a NEEDS and WANT list, you can save time, energy and money, while avoiding stress.
Your NEEDS list consists of ‘deal breakers’ and necessities that you can not live without. These items may consist of: 2 bedroom min, a garage and a certain location. If properties do not have items on your NEEDS list, we would not look at the property.
Your WANT list consists of items that not as strong as your NEEDS list. These are items are nice to have, but not a NEED. Such items may include: a fireplace, a basement, a front hall closet or a front porch swing.
4-Not understanding the 5 keys of finding a home.
When purchasing a home, the five most important aspects should be seriously considered, because they come into play when you would eventually sell the home.
Keep the following in mind when viewing a home for purchase:
1-PRICE-Can you afford this home? Is it worth the listing price? These questions pertain to the listing price and determine whether you view a property or not.
2-LOCATION-Unless you are purchasing a mobile home, location is a HUGE factor. Is the home close to work or a park? Are there any amenities nearby? What are the schools like in this neighborhood?
3-CONDITION-There are homes that are ‘turn key ready’ vs. 'fixer uppers.' Your background, time and budget may determine the type of home you seek.
4-LAYOUT-It is interesting how a poorly laid out home of 1000 sqft can feel like 750 sqft, just as a 750 sqft home that is open and designed well can feel bigger. Smartly laid out homes give you a good feeling.
5-CURB APPEAL-I consider curb appeal to be the ‘cover of the book’ for a home. Just as you may judge a book by its cover, the curb appeal photo shot of the home may determine whether you schedule a showing or not. Does the front yard have mature trees and landscape OR or does it have large patches of dirt and weeds.
3-Overpaying for a home.
Once you find a home that you love and want to put an offer in, how do you know if this home is priced well? It’s important for your realtor to run a comparison(COMPS) list to confirm the value of the home. Along with home characteristics, it’s important to know what boundaries to set for the Comp search.
After a property is Under Contract, an appraisal is conducted. If the appraisal does not meet the Under Contract price, you can begin another round of negotiating with the seller.
2-Not getting pre-approved by a lender.
There’s a big difference between a buyer being pre-qualified and a buyer who has a pre-approved mortgage. Anybody can get pre-qualified for a loan over a phone in 15 minutes. However, getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can't afford. It also gives you the opportunity to shop around for the best deal and the best interest rates. Do your research: Learn about junk fees, processing fees or points and make sure there aren’t any hidden costs in the loan.
1-Not hiring Dave Dombrowski.
Ok, maybe this is not YOUR #1, but you are getting a lot of value for your money. I have been helping people buy and sell homes for 24+ years. I am designated as a GRI(Greater Realtor Institute), a CRS(Certified Residential Specialist) and a CNE(Certified Negotiating Expert), all equating to over 250 hours of advanced realtor courses. In the event we do not know each other, feel free to request a ‘Test Drive with Dave.’ In this scenario, we can look at a couple of homes and if we are not the right fit, you are welcome to use another realtor. Something also to keep in mind is that I am a low pressure sales person. There is enough pressure in buying a home. You do not need more from your realtor. :)