Things Home Buyers Always Do Wrong
Not Having Their Financials In Order
It’s OK to have fun during the process, but not coming prepared can quickly turn the excitement phase into a panic phase if you don’t have your financials in order.
A pre-approval for your home loan and/or proof of funds letter for the downpayment is one of those golden things that sellers look for to let them know you are serious and not wasting their time.
Always have several versions of your proof-of-funds letter and your pre-approval handy at all times. This will put you above the competition when you find a home that you want to go after.
Not Researching The Neighborhood
Knowing a neighborhood by only listening to what your realtor is telling you, as opposed to actually researching the neighborhood, are night-and-day differences. It’s important for you to actually speak to the locals at “Mom-and-Pop” stores, cafes, restaurants, markets, etc.
Immersing yourself into the neighborhood as a “local” will allow you to catch information that will not be disclosed by your realtor. This will give you a clearer picture of your surroundings.
Always, ALWAYS go back to the neighborhood at nighttime. It amazes me how one neighborhood can be in the daytime vs. night. Loud music, parties, etc. can sometimes be observed only at night. So it’s a good idea to drive by a few times to see what’s going on after the sun sets.
Not Mentally Preparing To Deal In “Large” Numbers
Your home is (for most of us) the largest purchase you will make in your life. Now consider how you live your daily life – shopping at the market, buying gas for your car, shopping for clothing, etc.
Your mind is constantly dealing with “smaller” amounts of money; i.e., “how can I save $10 on this shirt/blouse” or “Wow, the price of avocados really went up”.
This type of daily conditioning sets you up for a shock when you start dealing with home prices.
Sometimes it helps to switch to thinking in percentages, rather than actual values – as in, “this home is asking 15% more than the last home we just saw”.
Also, if you are getting a mortgage, think in terms of how much your monthly payment will be instead of thinking always in terms of the sticker price of the home.
Sometimes adding another $20,000 on to the purchase price of the home, really doesn’t amount to much of a change in your monthly payment.
Not Doing Proper Research On Their Realtor
Seeing a working real estate agent can be deceptive. From the surface, it looks pretty easy – I mean, showing a home and talking about the view, the kitchen, etc. while wearing some fancy shoes and expensive car lease – How hard can it be??
The truth is agents deal with an enormous amounts of stress and complications. Many of them are expert problem solvers, have “insider” information about properties/areas and can get you a great price on your home from their negotiation skills.
Just like in any profession though, there are the good and the bad. An inexperienced agent can cost you time, money and can actually minimize your chances of finding the property you really want.
Always research your agent, thoroughly. I’m not talking about looking about their rave reviews on their own website, but actually speak to their past clients. If they’ve sold a home in the neighborhood, don’t be afraid to knock on the door and say that you’re thinking of moving there. Ask the owner about the agent and how their experience was with them.
If this sounds like “intrusive” or unnecessary then just think about the consequences of not having this information. Do you always believe every salesman based on what they tell you? No way! Do your research.
Please don’t make the mistake of becoming the agent’s BFF. Honestly, do you really think that they would hang out with you if you weren’t looking for a home? It’s a business relationship – nothing more.