When buying a home, you need an expert in home analysis, contract preparation, negotiation and much more. I’m often asked, “what are the biggest mistakes people make when buying their homes?”
While cliché, home purchase decisions are the most important purchase decisions of our lives, because these decisions involve hundreds of thousands of dollars, places you will live for an average seven years, and investments which affect your financial well-being, while you live in the home and when you sell. So, you need help…here’s where:
- Mortgage Confusion. In an April survey by Zillow, homebuyers answered basic questions about terms, how to choose a lender and financing and were wrong nearly one-third of the time. Among the survey’s findings, 31% of buyers don’t think it’s possible to get a mortgage for less than 5% down; 34% don’t know what “annual percentage rate” (APR) means, 25% believe a homebuyer must close with the lender that pre-approved them, and 24% believe the best mortgage deals are through their current banks…all of which aren’t the case.
- Lacking Vision. You may not be able to renovate now, but it might be worthwhile to live with some “ugliness” for a while to buy a house you can afford. If the home is in the right location, for example – something you can’t change – you can work on the cosmetic imperfections over time. If you upgrade yourself, you will buy cheaper and will likely see a jump in your equity, which helps you improve your financial picture when you sell.
- Hiring the Wrong Agent. While agents may be experienced, they may not have real know-how on things like price analysis, offer strategies or renovation. Some agents will simply present you recent sales “comparables” or do an analysis using rudimentary MLS tools…without any education in statistical analysis or negotiation. Some agents have building and renovation knowledge, which will not only point to potential problems but also show you opportunities for future equity, even before you make an offer and a home inspection.
Once you decide to buy, you need to learn what you don’t know. With an expert agent, you’ll get help making a wise purchase and be most successful.