9 Homebuyer Traps and How to Avoid Them
Be Careful to Avoid These 9 Buyer Traps!
|Cut costs and avoid common buyer traps by using a systemized approach to securing the home that’s best for you.
Buying a home is always a major investment. It can become more expensive than it needs to be if you don’t know how to avoid some common and costly traps that can result in paying too much for the home you want, losing your dream home to another buyer or, buying the wrong home for your needs.
Using a systemized approach when you buy a home will help you avoid common traps, cut your costs, and secure a new home that’s just right for the needs of your family.
This important report will make you aware of the nine most common and costly homebuyer traps, how you can identify them, and how to avoid them.
(1) Do not offer a blind bid.
When you bid on a home, how much should you offer? How do you know if the asking price is too high, or if it’s low enough to be a great value?
To make a sound decision, you must research the market to learn what similar homes are selling for. If you don’t do the research first to understand what comparable homes are selling for, you will be bidding blind. Without information about the local market, you might bid too much, or your bid could be too low to be competitive on a potentially great deal.
(2) Don’t end up with the wrong home.
Deciding what you want or need in your new home may seem like a simple enough task, but it can turn out to be more complex than you thought. What is easy is allowing your excitement and emotions to influence your decision, which could result in finding yourself the proud new owner of a home that’s larger or smaller than you need.
When you fell in love with the house, you may have decided it was worth driving an extra few miles to work every day, but when you have to make the trip twice a day during rush hour, you could quickly rethink that assumption. Or the fix-ups that seemed worth the trouble in the excitement of the moment have become dreaded chores now that you actually have to do them!
Before you begin the search for a new home, write out a list of exactly what you need, and carry it with you to every home you look at. Remind yourself frequently that your emotions will certainly influence you unless you can put them aside and base your decisions on the requirements on your list.
(3) Is the title clear?
Have a title search completed early in the negotiations to find out if you will own the home free and clear. Your excitement will fade quickly if you find out late in the process that there are tax liens, leases, easements, undisclosed owners, or other encumbrances on the property.
(4) Verify that the surveys are accurate.
Always make sure to request an updated property survey, one that clearly shows the property boundaries, as part of your offer. If the available survey isn’t current, there could be structural changes (additions to the house, a new swimming pool, or a new fence which changes the boundary line) that are missing from the survey. Make sure that there have been no changes since the survey was prepared.
(5) Be on the lookout for undisclosed fix-up items.
Unfortunately, many sellers will avoid mentioning some of the less visible defects that a thorough inspection would reveal. Your best bet: hire an independent inspector to do a professional inspection—inside and out—and make the contract contingent upon the report you receive. The report should alert you to everything that needs to be fixed and the approximate cost for fixing it. Keep in mind that the seller wants to get as much for the home as possible, and may try to maximize the profit by not revealing problems that aren’t easily detected. If you are unable or unwilling to hire a professional, plan on doing your own inspection, keeping in mind that any fix-ups you need to do may turn your great deal into an expensive headache.
(6) Save time and headaches with Mortgage Pre-approval.
Mortgage pre-approval is fast, easy, and absolutely free. A pre-approved mortgage gives you a sense of freedom and security while you shop for your new home: you know, in advance, how much you can spend and that the money will be there when you find your dream home.
(7) Avoid delayed closing and final settlement.
The final closing and settlement can be delayed if the seller fails to make repairs as specified in the contract, or somehow alters the spirit of the agreement. Protect yourself by agreeing on a dollar amount sufficient to cover repairs the seller agreed to but failed to make. Have the seller deposit the agreed-upon amount in an escrow fund to be used for repairs that aren’t completed. Prepare a list of mutually agreed upon issues, walk through them, and check them off your list if they have been fixed to your satisfaction.
(8) Beware of hidden costs.
To protect yourself from last-minute surprises, ask your lender to project your total charges in writing well before your closing date.
It is far better to identify and understand hidden costs such as loan disbursement charges, underwriting fees, etc. in advance than to be surprised by them at the closing.
(9) Don’t rush through the closing!
Closing is the most critical part of the home buying process. You can save time and avoid problems on closing day if you insist on seeing all of the paperwork the day before you sign anything.
Read through all the legalese and fine print to make sure the documentation accurately reflects your understanding of the transaction, and that nothing has been added or subtracted without your knowledge and approval. Verify that the interest rate is correct and that everything that should be covered, is covered.
You may run into last-minute problems if you try to rush through this at the closing, problems you may not be able to correct without compromising the financing, the terms of the contract, or even the purchase of your new home!
We hope this article has alerted you to some of the many pitfalls home buyers are subject to, and has shown you how to avoid them. These are only a few of the most serious problems you might encounter, but we have many other similar articles that are available to you at no cost.
If we can help you or anyone you care about understand the complexities of purchasing a home, contact us to schedule a free consultation. We’ll chat with you for about 15 to 30 minutes and show you the latest technologies and strategies for buying a home.
No high pressure; just plain, honest talk. Your consultation is completely free and does not obligate you in any way.
We look forward to hearing from you soon!
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