Rates are low, prices are low..what is not to like? Right now is one of the best buyer markets we have seen in a lifetime. Yet, when people are entering the market, they are pursuing a course of DYI..or do it yourself. I am not sure why buyers hesitate to utilize professional Realtors but I believe it has to do with the ease a home can be found on line and the idea that contacting the listing agent directly will save them money. Rarely will using the listing agent save you money. It is my opinion that a professional listing agent can handle representing the seller and buyer..but how does a buyer know? In our office, with the majority of listings we assign buyers to a different agent than the listing agent. Even when a buyer has a contracted buyers agent, it is still prudent to be wise to some of the pot holes that may come up on the drive to a home purchase.
Here are some things to make sure you and your agent are avoiding.
Are you looking at the right home for you and your family? I see many first time buyers squeezing every dollar of borrowing approval in order to buy the biggest house. Somebody forgot to tell them that they need extra money to buy furniture, lawn equipment and heat the home. Keep in mind that you may one day wake up with an emergency and a need to make a repair. You need savings. Don’t tie your hands behind your back buying more home than you can afford…no matter what the mortgage lender tells you.
When it comes to the right home, please do not get hung up on foreclosures unless you have some reserves and can make repairs. Understand that foreclosed homes have been vacant for a long time and often will need investment that will only come from a future buyer.
If you are looking at homes from out of town, please invest in a buying trip and do not make offers without inspecting a home. I think this is one of my real pet peeves with agents today. If a buyer is a professional investor and the home clearly will require that type of buyer, at least tell the investor to have his local contractor come inspect the home. I really can’t think of anybody else that should be making an offer on a property without seeing it. Yet this still happens and it usually results in a cancelled deal and some pretty upset sellers.
After inspecting a home, ask your agent for comparative sold properties (comps). Make sure you understand what condition these comps represent and then build in your cost of repairs or maintenance. The market is hungry, but it is not stupid. We see offers everyday submitted because somebody has given a buyer some stupid formula to utilize on all offers. Usually it is based on a percentage of list price. Not only lazy, but the big news is the corporate sellers will not even make a counter offer to these types of offers. They just send a rejection back. Do your homework if you really want a home.
If a buyer is paying with cash, please still invest in a buyers title policy. Don’t fall into the idea that you do not need to incur this extra cost. Title insurance is the best money you will ever spend when buying real estate. It will protect you from surprise liens, taxes and other cash draining issues that only a professional title search will reveal.
My next post will provide some more tips for avoiding costly home buying mistakes. Yes there are more than just these and I hope you will continue to make yourself an educated, prepared buyer!
As of December 1, HUD has changed the selling agent incentive plan that was available to agents in Florida and Indiana. The new incentive offers bonuses between $300 and $600 when properties close in 43 days or less. Another great reason to sell HUD homes!
