Top 5 Homebuyer Mistakes

1. Spilling  the Beans – All real estate agents work for the seller.  Their job is to try to obtain for the seller the best possible price and terms for the seller’s property. They are REQUIRED to give the seller any information about the buyer (personal, financial or confidential) that would help the seller in the sale of his or her property.   The remedy is to work with a Buyer’s Agent, who owes all allegiance to their buyers!  They guide buyers through the entire process and work for their best interest at all times (by law!). Best yet, buyers do not pay a penny to their buyer’s agent…seller’s agents agree to compensate buyer’s agents and the amount is already documented in the Multiple Listing.  If a buyer does come unrepresented, the lucky seller’s agent pockets the profit. Don’t talk to any agent but YOURS!

2. Sabotaging the Mortgage –  Before starting the home search, buyers should  obtain their credit reports and correct any mistakes.  (It is free at Mortgage applicants’ credit score affects the interest rate they will receive (The FTC reports one in five Americans has an error on his or her credit report). Once completing the loan application, do not make any changes to your financial situation.

  • Do not buy large ticket items: appliances, furniture for your new house, electronics, cars
  • Don’t change your job situation
  • Do not open new credit cards or bank accounts
  • Make no big money moves or get large amounts of money from other people.

3. New construction pitfalls –  Who do those nice agents in the Model Home work for? The builder, NOT you in any way.  Don’t sign in, don’t open your mouth…go get your Buyer’s Agent!  Builders have Buyer’s agent’s commissions already built into their marketing budget; you do not get credit for being unrepresented.   What you see in the model is often not what the house is that you buy. They are full of upgrades which are used as after- market profit machines for the builders.  White ceilings? Extra, electric garage door opener? Extra.  Experienced Buyers Agents know what upgrades to ask about before you sign the contract, what upgrades the builder has given away to past clients, and know about special deals to ask for. For example, at the end of our price negotiations with a builder, I asked him about his parent company’s earlier promotion for $2000  off for police and public service workers.  Both of my clients qualified for the promotion they received an additional $4000 off the price!

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4. Buying too much house – Don’t get enamored by a house that is above your price range. Home buyers should create a budget before even beginning their home search to determine just how much house they can really afford. A good rule of thumb is to devote no more than a third of your monthly household income to housing costs, which include mortgage principal, interest, taxes, and insurance.

5. Picking a Bad Lender –  54% of loans in 2013 did not have lender “pull-through”.  Meaning the lender was not able to get the buyer to the closing table on their loan.  Can you imagine being days away from closing to learn the underwriters of your loan backed out??  The worst culprits are the large Mega Banks that many people trust. Instead, ask your Buyer’s Agent for lender names.

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