Buying a home is a major investment, but it can be even more expensive because of some common and costly mistakes.
What price should you offer when you make an offer on a home? Is the seller’s asking price too high, or does it represent a great deal? If you fail to research the market in order to understand what comparable homes are selling for, making your offer would be like bidding blind. Without this knowledge of market value you could easily offer too much, or fail to make a competitive offer on an excellent value.
Buying the Wrong Home
What are you looking for in a home? A simple question but the answer can be quite complex. Many buyers have been swept up in the emotion and excitement of the buying process only to find themselves the owner of a home that is either too small or too big. They may be stuck with a longer commute to work, or require more fix ups and repairs than they really want to deal with. Take the time up front to clearly define your wants.
Make sure very early on in the negotiation that you will own your new home free and clear by having a title search completed. The last thing you want to discover is that there are encumbrances on the property such as tax liens, undisclosed owners, easements, leases or the like.
As part of your offer to purchase, make sure you request an updated property survey which clear marks your boundaries. If the survey is not current, you may find that there are structural changes that are not shown, such as additions to the house, a new swimming pool or a neighbour’s new fence extending a property line etc. Be very clear on these issues.
Don’t expect every seller to own up to every physical detail that will need to be attended to. Ensure that you conduct a through home inspection early in the process. Hire a home inspector to objectively view the home indie and out and make the final contract contingent upon this inspector’s report.
Not Getting Mortgage Pre-approval
Pre-approval is fast, easy and free. With a pre-approved mortgage you can shop for your home with a greater sense of freedom and security knowing that the money will be there when you find your home.
Rushing the Closing
Take your time during this process, and insist on seeing all paperwork the day before you sign. Make sure this documentation perfectly reflects your understanding of the transaction, and that nothing has been added or subtracted. Is the interest rate right? Is everything covered? If you rush this process on the day of closing, you may run into a last-minute snag that you can’t fix without compromising the terms of the deal, the financing or even the sale itself.