Mistake #1: Buyer wants to look at homes first and then get prequalfied for a mortgage. This is a waste of everyone’s time. Why would you want to preview homes you can’t afford? Every home you see after (that you can afford) will pale in comparison. You need to speak to a loan officer in order to see how much you can borrow. Mistake #2: Buyer wants to get a deal that is too good to be true. I actually had a Buyer say to me, “I want to buy a home for $500,000 and sell it for $1 million.” What? It is not that easy, especially in our struggling market. If it sounds too good to be true; it is! Mistake #3: Buyer will not be loyal to one Realtor. Buyers – you need to form a connection with a Realtor. This person will be holding your hand through the whole process and needs to understand your needs. Find someone who relates to you and who you can relate to. You will be spending a lot of time with this person. Yes, if your Realtor starts behaving badly, let him/her go. But ideally, you need to pick one Realtor and be loyal. Mistake #4: Buyer needs to move in 30 days and keeps putting offers in on short sales. This will not work. Short sales take between 3 to 5 months. Period. There are no short cuts. Even if you bring all cash to the deal, that will not matter. Mistake #5: Buyer wants to change lenders half way through the process. Getting a loan is a lengthy process. When you get a prequal letter from a loan officer, this is just the tip of the iceberg. There is a lot of verifying and underwriting that is done. Often, the underwriting department is still processing your file until the day of settlement. If the Buyer changes lenders half way though, this will not go to settlement on time and the Buyer will be in Default. That is why it is so important to do your due diligence with regards to interest rates prior to submitting an offer. Buyers should decide which lender they will go with no later that 7 days after full ratification. Mistake #6: Buyer opts to waive the home inspection. Buyer thinks home inspections are a waste of money. You need to get a home inspection. Your home inspector will do a complete exam on the whole property; electrical, plumbing, HVAC, check the roof, etc. If the home inspection uncovers something, this could be the best $300 you’ve ever spent. Even when purchasing a new construction, you should get a home inspection. Do you think that new home builders don’t cut corners to save money? Think again! Mistake #7: Buying the most expensive home in the neighborhood. It is never good to purchase the most expensive house. The other homes in the neighborhood will decrease the value of your home. How will you know if you are buying the most expensive home on the block? Ask your Realtor to do a CMA of the neighborhood. A CMA is a comparative market analysis; this will analyze the data of the neighborhood. Mistake #8: Buyer limits his search to Open Houses. This is the largest purchase a buyer will arguably make. You need to view ALL your options. While visiting Open Houses are fun, you really need to consult a Realtor in order to gain access to a wide variety of homes currently available on the market. Mistake #9: Not knowing the total costs and not having money in reserves, i.e. rainy day fund. If you don’t have money in reserves, you should probably not be buying a phone. What if the water heater breaks? Or you need a new roof? You need to have money in reserves to help you pay for these items. Mistake #10: Not considering your long term needs. Yes, you need a 3 bedroom home now, but what if your family unexpectedly grows? Or maybe your in-laws will need to move in to help with the kids. Make sure you have enough room not only inside but also yard size, too. Bonus Mistake #11: Buyers needs to find “the perfect home”. The perfect home probably doesn’t even exist in the buyer’s head. If you are too picky, you will probably never find a home. While it is important to think about features you need and want in a home, it is more important to view and realize what is currently available. Unless you have ample money to build your dream home from scratch, you will be purchasing what is available at the time of your purchase.
Betty Westerlund, Real Estate Consultant
Direct Cell: 1(540) 845-7247
Licensed Keller Williams Virginia Real Estate Agent in Stafford, Fredericksburg, Spotsylvania, Caroline, King George, Ruther Glen, Culpeper, and Orange