9 Home Buyer Traps and How to Avoid Them

Buying a home is the most important purchase most people make in their lives. Therefore, it’s vital to avoid making mistakes that could ultimately cost you thousands of dollars. Many home buyers are heartbroken when they find out they have paid too much for a home, or lose the home they really want to another buyer at the last minute. Or, much worse, they can realize after living in their new home for months, that they have purchased the wrong home for their needs. By being informed about the real estate market, and the home buying process, you can avoid these costly mistakes.

1. Not knowing the right asking price for a home in advance.

Before bidding on any new home, it is important for you to do the research and found out what other comparable homes are selling for in the same area. If you bid too much, you can lose thousands of dollars, and if you bid too low, you may lose the house to a more knowledgeable buyer. Take the time to understand the market trends, and know the appropriate selling price of every home you consider.

2. Buying the wrong house for your needs.

It’s easy to buy a house because you’ve fallen in love with it. But what happens when you realize, after living in it for a few months, that it isn't practical for your life? Many homeowners find that the house they've recently purchased is either too big or too small, or that their new work commute is more than they bargained for. By making two lists, one listing what you need in a house, and one listing what you desire, you can clearly define what your priorities are before you commit.

3. Having an unclear title.

Have a title search completed on your new home early in the negotiation process to ensure that you will own it free and clear. Tax liens, undisclosed ownership of the property, easements, or other title complications can really waste your time and money if they are discovered too late in the deal.

4. Dealing with inaccurate surveys.

When in doubt, ask for an updated survey as part of your offer to buy the property in question. Old surveys may not show recent structural changes, such as swimming pools and room additions. Be very clear about your concerns...it is your right as a buyer to have an accurate survey of the property.

5. Dealing with repairs that have not been properly disclosed.

Insist upon a thorough building inspection early in the negotiation process. Some owners may be reluctant to disclose every single thing that needs fixing in the house for fear of having the deal fall through. By hiring an independent inspector, you will have a more accurate picture of the condition of the house, and an estimate of how much it will cost to deal with any repairs that are needed. Make sure that the final contract is contingent upon the results of the inspection.

6. Not getting your mortgage pre-approved before you start your search for a new home.

Most lending institutions offer mortgage pre-approvals without cost or obligation, and many will do it over the phone. Having a mortgage pre-approval not only helps you in knowing how much you can afford, but it can also be used as a tool during the negotiation process.

7. Not complying with the contract.

An attempt by either the seller or the buyer to make changes to the contract toward the end of the buying process could cause the deal to fall through.

8. Discovering unexpected and hidden costs.

Stay informed of all the miscellaneous costs involved with the selling of the house, and be aware of any fees that might be “sneaked” through toward the end of the deal. Have your lender explain all of these costs in advance, and in writing. And if you're unsure about the validity of any of these costs, have a real estate lawyer review all of the paperwork.

9. Having the closing of the sale rushed.

Resist “getting everything over with” toward the end of the deal. Take your time and review all of the paperwork involved with the sale, and make sure all of the details have been addressed. Make sure that the interest rate of your new mortgage is the one you agreed upon, and that there are no unexpected closing costs. If you rush through the closing process, you might be dealing with obstacles that could delay your move into your new home.

We’re here throughout the entire purchase process to answer your questions and to help you feel comfortable with the process and yourpurchase. What questions do you have? Please email us at info@dickandkarla.com or call us at 813-294-5786.