Mistake _14. Not Getting a Professional Home Inspection

Steve and Tiffany were so excited to find the charming brick bungalow on a tree-lined street. It was in an area they had been looking at for several months and it had just come on the market that morning. Their enthusiasm was high as they went through the home, noting all the wood trim and spacious floor plan of a 1940s bungalow. It was exactly what they were looking for. A home where they could strip off the layers of paint and wallpaper and restore its former charm. Since Steve and Tiffany could come up with a 20 percent down payment, they opted to finance conventionally to avoid PMI costs. The deal closed three weeks later and two happy buyers moved in ready to start their renovation project.
It didn’t take long before the new homeowners discovered the problems. The gas company tagged the furnace because the service tech suspected it had a cracked chamber and the vent pipe was too near a wood joist. Other problems, typical of older homes that haven’t been upgraded, added up.
Unfortunately, the buyers had spent most of their money buying the home and didn’t have funds for the major problems they encountered. Interestingly, Steve and Tiffany felt that the bank’s appraiser would find any problems and list them on the appraisal. In reality, an appraiser is interested only in the overall value of the home as compared to others recently sold in the neighborhood. The appraiser’s job is to ensure the home is worth what the bank loans on it. So what should Steve and Tiffany have done differently? First, they should have hired a profession inspector. The inspection report would have outlined exactly what problems lurked under the rafters, joists, and in the dark spots of the basement. The buyers will know the condition of the appliances, furnace, water heater, and plumbing The buyers will have a list of problems and about how much it will cost to fix them. They’ll go into the sale with both eyes open and won’t have to max out their credit cards on unforeseen repairs.

Mistake _13. Not Getting a Buyer’s Broker Early On

A good buyer’s broker on your side is the best thing you can do to find the home you’re looking for and get the best deal. These agents know the market, the best neighborhoods, and what type of loan will best fit your situation. You’ll save a lot of wheel spinning if you get an agent in the beginning. The best part is that the fee is typically paid by the sellers, who are glad to pay it to get their home sold to a qualified buyer.
Max and Andrea were first-time homebuyers who had been looking for three months and were getting frustrated. Every weekend they circled ads, toured open houses, and called on for-sale signs. The bewildering array of choices only added to the confusion. Finally, one of Andrea’s coworkers suggested they talk to Carol, an agent she knew through her school’s PTA.
The first thing Carol did when she met with Max and Andrea was to ask them if they were working with a mortgage lender. When they said no, she told them that step number one in buying a home was to find out what you could afford. She then arranged for them to meet with a mortgage lender to get the process started. A couple of hours later, the lender called Carol and told her that Max and Andrea looked pretty good. There were a couple of small credit problems he had to clear up, but that shouldn’t be too difficult, and they could go up to about $150,000.
Meeting with the buyers again, Carol quickly determined what type of home, the number of bedrooms and amenities they wanted, along with areas within a reasonable commuting distance of work. The next step was entering the information into the multiple-listing database. Since this database is updated continuously, Carol limited the search to homes that had come on the market in the last two weeks. She knew that the best homes don’t last too long, so those are the ones you want to look for first. If the first list doesn’t produce a winner, the search is extended back to, say 30–60 days and so on. The longer a home has been on the market, the greater the chances are that it’s either overpriced or a dump where the buffalo roam. In the first search, Carol pulled up 14 homes that fit the buyers’ criteria, and the search was on. The first eight homes they looked at over the next two days were nice, but didn’t quite fit. On the third day of looking, however, the tenth home on the list turned out to be a winner. It was what the buyers were looking for. Max and Andrea quickly made an offer and Carol presented it to the sellers that evening. It was accepted with a closing scheduled in three weeks.
It’s true you can find a home on your own, but why spin your wheels and go through the hassle when you can have the services of a professional who will make sure you make the right moves? So, how do you find a good broker? Ask other people you know who have bought homes if they can recommend a good agent. Excellent sources are mortgage lenders and title people. They know who are bringing in the deals and how good a job they’re doing for their clients. Once you find a good realtor, it’s in your best interests to work with her on an exclusive basis. You may be asked to sign a Buyer’s Agency Agreement. If you specify that it can be canceled by either party, you’ll have a way out if you find you can’t work with that agent.

Mistake _12. Not Being Able to Make a Decision

When you’re searching for the right house, you should take your time and look at as many homes as you need to in order to get a good feel for the market. Once you’ve narrowed down your choices and decided on your dream home, then it’s time to move swiftly. Many first-time homebuyers lose a house or two they like before they realize that they have to move quickly. Indecision can cost them the home of their dreams.
Todd and Alex found this out when they were looking for their first home. After going through more than two dozen houses and not seeing anything that they liked, they were getting a little discouraged when their realtor called about a home that had just come on the market. When Todd and Alex drove by, it was the home they were looking for, an updated two-bedroom cottage with newly painted yellow siding, full basement, and a detached double car garage. It had been on the market less than a day. Their agent wanted them to put together an offer immediately, because he didn’t think it would be on the market long.
But, as much as they wanted the home, Todd and Alex hesitated. They were scared to make a commitment and wanted to wait until the weekend when their parents could go through it. Unfortunately for them, the weekend walk-through never happened. Another couple also loved the home, made an offer, and the ‘‘for sale’’ sign got a bright red diagonal ‘‘sold’’ sticker.
If you like the home, chances are other buyers will also. It’s not uncommon for a home to sit on the market for weeks with no action, and then suddenly two or three offers come in at the same time. Fear of making a mistake is usually the culprit. The best way to work through this is to talk it over with your broker, lender, or someone who has bought a house before. Once you get it out in the open, it becomes easier to deal with.
Buyer’s remorse is the industry term for this fear, and it applies to not only buying a house but also a new car, appliance, engagement ring, or whatever. Most homebuyers get it somewhere along the way. Knowing that’s it out there lurking and will probably strike when you least expect it should make it easier to deal with when it grabs you.