Not all that long ago I was a first time home buyer. Actually, it was a while ago, but that's okay! I remember being very excited about owning my first home. I was also pretty naive and during the home buying process realized just how little I knew about real estate and how difficult it was trying to navigate the murky waters and not get eaten up by folk looking to take advantage of me.
It was easy to make mistakes back then, and is even easier nowadays to turn a pleasant dream of owning a home into a nightmare. But if you're able to avoid the 7 common mistakes that home buyers make it could help you achieve a safer and smoother transaction.
First, changing jobs during the home buying process is a definite no-no! Lenders like to see employment stability and job tenure, and as a general rule will hold job hopping against you. So, unless you just can't stomach your job another minute tough it out until you close on the sale of your home.
Second, never give earnest money deposits directly to For Sale by Owners. If the deal falls through you won't have any leverage to get it back. Instead, put the deposit into a trust account until the transaction is finalized - title companies, attorneys and closing agents can help you with this. In any regard your contract needs to specifically state what will happen to the deposit in the event that the transaction falls through.
Third, stay practical and realistic during the home buying process and understand that while some sellers are willing to fix their homes to sell them others aren't. So, don't let a refusal to make repairs close the door on your dream home. However, at the same time don't let your desire for a particular home blind you to costly repairs down the road.
Fourth, arrange in advance to have the utilities turned on in your new home. The utility companies usually need at least a few days to switch the service. Also, don't forget to cancel the service at your old residence. This seems simple enough, but there are so many things to remember that this one is often overlooked.
Fifth, be sure to get hazard insurance for your new home and be able to show proof of purchase prior to closing. Failure to have insurance at the time of closing may delay the closing, which could result in all kinds of unforeseen complications; angry sellers, you've already given notice to move out of your old place and have no place to go, etc.
Sixth, purchasing a home is a business deal, so treat it that way. Don't get too close and personal with the seller, as it could unexpectedly lead to hurt feelings and/or deal breaking situations. For example, you could make a seemingly harmless comment about how you dislike like the decorations in the mother in law suite, only to have the seller get upset because they have great sentimental value attached to it.
Finally, use an agent, unless you're well schooled in real estate transactions. It's most buyer's fantasy to save money by cutting out a Realtor. However, it's a full time job keeping up with all of the daily details of a contract, including the lender, the seller, and the seller's agent. It'll be your agent's responsibility to do all of this; as well as disclose any information that they are aware of that you might otherwise be unaware of.
In closing, buying a home is a business transaction and may be one of the largest transactions you'll ever make. By treating it that way and surrounding yourself with knowledgeable professionals you can have smooth, safe transactions. Anything less becomes risky business, at least until you know what you're doing.
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