Have you decided to buy a house and want to make sure you have a smooth transaction? In this video, I’m going to tell you all about the mistakes to avoid when you’re buying a house. We’ll explore everything from making an offer to keeping your emotions in check so you can get the house of your dreams.
Do Your Homework
The first mistake that I see almost every week is that buyers get ready when they’re ready. What I mean by that is that they go look at a house, fall in love with it, and then start the process of getting ready to buy. Unfortunately, when you do that in this market, most buyers run out of time.
Here’s what I recommend doing instead. Get with your real estate agent and go over the contract of sale. Discuss what’s required to make an offer and go over all the things that you need to think about and be prepared to do when the time comes to make an offer. That way, when you’re looking at houses, you can just think about the house and if it’s the right property or location for you.
When you’ve done your homework, you don’t have to worry about how you’re going to prepare the offer. But when you wait to do this and find a house you absolutely love, you’ll likely run out of time to even make an offer.
Talking With Your Lender
The next mistake people make is waiting to talk to a mortgage lender until they find the right house. Most of the people we work with are very savvy. They have a good understanding of what their income is and what their credit scores are. However, they often forget that there’s much more to a mortgage.
We deal with a lot of condominiums, a lot of HOAs, and many other things that a mortgage lender has to look at. Sometimes, the mortgage lender might need a little bit of help or a little bit of time to get you pre-approved. More importantly, if you’re self-employed, it’s going to take even longer to get pre-approved.
What I don’t want to happen is to see you fall in love with a house, call the lender, and run out of time before you can purchase the house or somebody else gets to it before you. You also want to make sure that you’re working with a lender who is local and familiar with our local market. They should also have experience with the property type that you’re buying.
Again, if you’re buying a condo, you want to make sure the lender has worked with or underwritten those types of contracts. You want to relay that confidence to the seller that you’re going to be able to get the job done.
Offers And Negotiations
One of the biggest mistakes (that’s also the most difficult to understand) is offering too little in your initial offer. This will cause you to have a longer negotiation period. A lot of buyers think that the right strategy to get a better price on the house is to make a lower offer. While that may make sense on the surface, here’s what I see happen very frequently.
Making a lower offer initially causes more back-and-forth negotiations with the seller. The more time that you introduce into the negotiation, the higher the chances that another buyer comes in to make an offer. For example, let’s say you’re the only buyer in the house. You make a low offer and you’re going back and forth in a negotiation with the seller.
While that’s transpiring, the seller gets another offer. Now you no longer have any leverage as a buyer because the seller has at least two offers instead of just one. I recommend a different strategy instead. It often works out better if you just come in with whatever your best number is. While it doesn’t have to be the highest number, it just needs to be whatever you are comfortable with.
Bring it to the seller as a take-it-or-leave-it offer so you can reduce the amount of time that it takes to negotiate with the seller. Hopefully, you’ll avoid another buyer coming in and beating you out.
The Right Advice
Another big mistake that I see is people getting advice from the wrong people. Oftentimes, these wrong people are the people that you love the most. What usually happens is you’ll see a house and really like it. However, your parents, your sibling, your best friend, or some other professional talks you out of it because they think it’s a bad idea.
Then you call me a few months later and say, “Ah, I’m kicking myself! I really wanted that house, I never should have listened to my friend who told me it was a bad idea.” Of course, I’m not telling you to buy the house no matter what. Just make sure that it’s your decision and not somebody else’s.
Whether you do or you do not buy the house, you want to make sure that you’re comfortable with that decision being completely yours.
Check Your Emotions
The last biggest mistake we see is getting too emotional in a real estate transaction. Don’t get me wrong: buying and moving is an extremely emotional process. However, there’s a time and place for it.
First, remember that this is your decision. You have to be comfortable with whatever you choose to do. There’s always more time and there are always more houses. So if it’s not the right house for you, that’s a fine decision. Wait for the next one, and we’ll get some clarity on what to do about a future property.
My advice? Don’t let your emotions take over. Be emotional to make sure it’s the right house, but after that, you may have to treat this more like a business decision based on the dollars and cents.
I’m Here To Help
I hope this gave you a good idea of some of the biggest mistakes we’ve seen buyers make over the years. If you want more advanced strategies and other suggestions, you can reach me at 609-604-5958 and I’ll be happy to help.
Don’t forget to subscribe to my channel so you never miss an episode of my show, all about buying and selling at the Jersey Shore. Stay tuned to see what I feature next!