3 Most Common Mistakes Buyers Make
I am listing the top three mistakes I frequently encounter with buyers:
1. Getting Prequalified. You will need to contact a bank or a mortgage broker to find out how much home you can afford without feeling strapped. I always advise my clients to shop around and not go with the first person they called. Make sure this is a person you feel comfortable with and you can count on, you want them to be always available for you when you have questions or concerns about your loan. This person will be there for you from the beginning through to closing. By getting prequalified you will be saving you and your agent a lot of time and gas because now you know the price range you want to stay in. A letter from your bank or mortgage officer is usually required when submitting your contract.
I would like to stress not to change anything before closing, what I mean by this is do not make a purchase on credit or credit cards for example purchasing cars, motorcycles, appliances, expensive electronics, computers, etc... or quit/change jobs. The banks will check your status up to a day before closing to verfiy everything is the same and if it is not they can pull their loan from you.
**This happened to me a few months ago: I was the listing agent and another agent brought me a buyer (husband and wife). All went well, 2 days before closing their bank checked their credit report and their job status and to everyones amazement they both quit their jobs the day before to find jobs close to their new home! lo and behold the bank pulled their loan and they could not close. Unfortunate for them another contract came in and they lost their home. Their bank and agent warned them not to change anything but they left their jobs anyways thinking no one would find out.
2. Hire An Agent. Yes, I know we are in the technological age and 75% of buyers are shopping the internet for homes but once you find one or several homes to view this is when you need to hire an agent and you do not need to call the agent who listed the home, you can call any agent. Most buyers feel that they need to call the name on the sign thinking that only
that person can get them inside or that they know more about the home and this is far from the truth. Buying a home can be very stressful and complex and because it is the biggest single investment you will make in your lifetime you will require an agent who is on your side and who understands the new laws, technology and procedures with an increased level of professionalism. An agent can help you find your home, a great lender and the best inspector but If you make the wrong decisions by trying to do it on your own it can end up costing you thousands of dollars. I have been asked by buyers if they have to pay me for my services and the answer is NO, I get paid when we close on the loan by the seller so remember trying to buy a home without an agent is well......unthinkable.
**This happened to an aquiantance: He found a For Sale By Owner home to buy, he hired an attorney to help with the contract. By not using an agent, he had to do all the leg work himself which required him to take off work a couple of days. In the end he did not close on time because of paperwork he did not know he had to submit, he did not get a home inspection which later he found some expensive repairs that needed to be done, the lender he chose was a broker that charged him an arm and a leg along with junk fees, he did not do a walk through and during the move the sellers scuffed up walls and ruined molding throughout the house not to mention the aggravation he experienced through the whole process.
3. Get A Home Inspection: This is so important and I always tell my clients for their protection get a home inspection, I cannot stress this enough. I know the costs of buying a home can be overwhelming with closing costs, attorney fees, lender fees, etc.. you feel saving $400.00 on a home inspection would be a way to save but it can be the worst and end up costing you thousands in the long run. An inspector works for you and typically they will be at the home for 2-3 hours inspecting it from top to bottom which they ask that you be present for them to explain their findings. If there is anything major that is wrong with the home, you then can get out of the contract or ask the seller to pay for repairs. If your agent does not advise you to get a home inspection then you need to be firm and request one, you may call one of your own from a phone book or your agent can recommend one for you.
**This happened to a client of mine recently: My client bought a home one year ago from an agent who owned a home he was selling, the agent gave my client his word that nothing was wrong with the home, my client took him at his word and closed on the house. One year later because of health reasons he needed to sell and move closer to his children, he asked me to sell the home. We received a contract two weeks later, an inspector came on behalf of the buyers and this is what he found; the foundation was severely cracked and the house was sliding off its sil, this cost my client $7,000 to jack the back corners of the house up. The floor underneath the bathroom was rotten and barely hanging on, a contractor replaced the floor for $1,000. The cieling in the great room had a leak at one time but it was mudded and masked to hide imperfections, he saw a small hole and went to inspect it and when he touched it, his finger caved in and a large chunk came falling down, he spent $500.00 to fix the hole. This was only three items but the report was extensive. In the end he had to come to closing with about $13,000. If he would have hired an inspector last year he would have known about these issues and walked away.
