Common Buying Mistakes
Buying a new home can be a tricky process. Here are the top seven most common mistakes a buyer makes when purchasing a new home:
1. Budgeting
Many people go into the home buying process overestimating what they can afford to spend on a home. Make sure you have calculated all your expenses versus your current income. Once you have looked into your finances, go get pre-approved by a mortgage lender. This will ease your stress when you know exactly up to what amount the lender will allow you to borrow. As well as, helping you to narrow down your search criteria when you know exactly how much you can afford.
2. Failing to Check Credit History
Credit history is one of the main factors taken into consideration when applying for a loan. Many people have no idea what their credit score is, making it very surprising when they cannot get the kind of loan that they would prefer. You are entitled to a free credit report every year; make sure you take advantage of it. Doing so, you might be able to remove incongruities prior to applying for a mortgage rate, thus ultimately saving an interest rate point or two by cleaning up your credit report.
3. Different Brokerage Relationships are Available Which Include Seller Agency, Buyer Agency or Transaction-Brokerage
DEFINITIONS OF WORKING RELATIONSHIPS
For purposes of this document, seller also means “landlord” (which includes sub-landlord) and buyer also means “tenant” (which includes subtenant).
Seller’s Agent: A seller’s agent (or listing agent) works solely on behalf of the seller to promote the interests of the seller with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the seller. The seller’s agent must disclose to potential buyers all adverse material facts actually known by the seller’s agent about the property. A separate written listing agreement is required which sets forth the duties and obligations of the broker and the seller.
Buyer’s Agent: A buyer’s agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the buyer. The buyer’s agent must disclose to potential sellers all adverse material facts actually known by the buyer’s agent including the buyer’s financial ability to perform the terms of the transaction and, if a residential property, whether the buyer intends to occupy the property. A separate written buyer agency agreement is required which sets forth the duties and obligations of the broker and the buyer.
Transaction-Broker: A transaction-broker assists the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting the parties with any contracts, including the closing of the transaction without being an agent or advocate for any of the parties. A transaction-broker must use reasonable skill and care in the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction-broker concerning a property or a buyer’s financial ability to perform the terms of a transaction and, if a residential property, whether the buyer intends to occupy the property. No written agreement is required.
Customer: A customer is a party to a real estate transaction with whom the broker has no brokerage relationship because such party has not engaged or employed the broker, either as the
party’s agent or as the party’s transaction-broker.
4. Home Inspections
It is important to hire a professional home inspector. It could cost you much more than the standard of $250 to $500 for the inspection down the long run if your home is infested with termites or has electrical problems. Bottom line: you should never buy a home without having it inspected by a professional.
5. Expectations for Future Home
If you love a home at first site, do not pick up the pen and write an offer before considering the price, the location, you and your family’s needs, and the potential resale value. A home is a huge investment, most likely the biggest one you will ever make, consider all aspects to making a smart purchase!
6. Accepting Oral Agreements
Never rely on oral agreements. It does not matter how much you trust your buyer’s agent, the seller, or the seller’s agent, always make sure you have anything spoken about on paper. If the seller says the washer and dryer are negotiable but the agent says they are included, make sure you get in writing one way or the other.
7. Reading the Fine Print
Before signing your name to anything, make sure to read the fine print. Make sure to go through every detail with your Real Estate Agent, to ensure that you understand everything you are signing. This is, for many people, the biggest investment made in life. Verifying the contract is crucial.
