Buying a home takes more than just money. It takes planning and foresight. Making sure that you’re prepared before you begin your search will make your life a lot less complicated than waiting to complete your due diligence after you’ve found a home you’d like to make an offer on. Especially now, when the demand for homes is extremely high, these few tasks will ensure that you’ve properly set yourself up to be ready to make the strongest offer on the home you want.
6 MISTAKES TO AVOID
1. Not Hiring a Buyer’s Agent
Some home buyers believe it’s better to work with the listing agent directly hoping they’ll get a better deal than if they hire a buyer’s agent. Listing agents are contractually bound to act in the best interest of their seller, not the buyer. A buyer’s agent looks out for your best interests. They will show you homes that fit your specifications and steer you away from homes that don’t. A buyer’s agent will be familiar with local real estate market values and can negotiate a fair offer for the home. They, along with your attorney, will also help you navigate through all the legal paperwork involved in purchasing a home.
2. Not Getting Pre-Approved for a Mortgage
Looking around for a new home when you have no idea how much money you’ll be able to borrow is setting yourself up for failure and disappointment. Obtain a mortgage pre-approval before going into any open house. This will make sure that you don’t fall in love with a home that you can’t afford or aren’t prepared to make an offer on. Your buyer’s agent will strongly recommend that you obtain a pre-approval from a broker who will back you up throughout the entire buying process. In the meantime, you can use our Home Buyer Budget Worksheet to give yourself a reasonable idea of how much you’d like to spend on a home.
3. Settling Because You Think There’s Nothing Better
In a typical year, the inventory of homes on the market fluctuates as the year progresses, especially 2020 and the beginning of this year where things have certainly been different than in years past. At the beginning of a normal year, we find that it’s generally a seller’s market where there is a lower inventory than there are buyers. This makes it a very competitive climate and more difficult to find the home you want at the price you can afford. As summer approaches and moves into the fall, there is a shift and inventory tends to increase and the amount of buyers decreases, giving buyers more choices at more affordable prices. Over the past year with inventory being so low, buyers saw an extraordinarily high absorption rate, making it even harder to find a home. If you’ve been searching for a while and haven’t found what you’re looking for, don’t worry, nothing lasts forever! You have to stay vigilant and keep looking for the home that makes the most sense for you, your lifestyle, and your finances. If you settle and buy something you only half like, you’re going to find yourself back on the market sooner rather than later.
4. Getting Distracted by Staging
Staging is important because it allows you to visualize what a space can become. Some sellers take it to the next level with savvy tricks that you could easily get distracted with. From beautiful drapes to a dining table that has a stylish place setting, sellers are trying to appeal to your heart rather than your head.
As well, sellers often orchestrate a room to look larger and sometimes even cover up flooring damage. Make sure that you’re falling in love with the house itself and not the details being added while staging. Look under the rugs and behind the clothes in the closet. Make sure you don’t see watermarks in the basement hidden by storage. Use a discerning eye when at showings so that you’re making the most informed offer once you’re ready to move forward on a home.
5. Thinking You’ll Fix Everything up
Not every house is perfect and you may want to upgrade different aspects to make it feel like your own. This is totally normal and a great way to begin to feel like a new house is your home. It is, however, a very slippery slope that a buyer needs to be careful with as it is easy to underestimate how much time and money can go into these improvements. Make sure there’s money left over in your budget for improvements when looking at homes in a certain price range.
6. Dragging Your Feet
You don’t want to rush into a house if you are unsure but don’t take too long to make an offer if you want the house. Getting beat out by someone else because you are dragging your feet can be absolutely heartbreaking. Time is money and you don’t want to start the whole search process over when you were just about to make an offer. Houses these days are sometimes going under agreement before the first open house, so making sure you have the best buyer’s agent on your team will help you stay on track to get the house you want.