Buying a home can be an overwhelming experience, especially if it’s your first time going through this process. That’s why you need some home buying tips! There are so many factors to consider, especially because it’s probably the most important investment most of us will ever make. Deciding to buy a home is a big step, so it’s essential to be prepared before you start shopping around. Most people skip ahead to viewing houses, though, and due to a lack of knowledge, they tend to make some common mistakes they later regret.
Prevent this from happening to you! Read on for some key home buying tips…
1) Make Level-Headed Decisions
The whole process of buying a home can be very exciting. If you don’t have previous experience in this area, it’s easy to get carried away by the thrill of it. This is when you’re more likely to make mistakes that can cost you a lot of money. As a future homeowner, every decision you make will have an impact and repercussion. So, it’s important to look at buying a home with a cool head, like it’s a business deal.
Of course, the goal is to buy a home that you love and want to live in for many years to come, so there’s an emotional aspect. It can be challenging to set this apart from the financial side of things.
2) Not Knowing Your Budget
Often when people first begin looking at real estate, they’re not really sure how much they can afford. They may visit a spectacular house and fall in love with it, only to discover that it’s out of their financial reach. Then the search process changes because it’s impossible for them to forget about that perfect home.
To avoid this situation, it’s a good idea to take a realistic look at your budget to figure out your real estate price range. This will also help you narrow down your search for the perfect home. On the contrary, if you start with properties that are way out of touch with your finances, then no house that is within your budget will seem right. It’s also important to include things like HOA fees and closing costs in your estimate in order to avoid stress later on.
3) Not Applying for Pre-Approval
We’re often asked for home buying tips. Here’s another big one. Before you start shopping for a home, or think about making an offer on one, we recommend applying for pre-approval on a loan. Otherwise, you can waste a lot of time looking at houses. It’s better to know up front, instead of applying for a loan that the bank ends up rejecting, or finding out you can’t secure the full amount you need.
This ties into starting with your budget in mind. Pre-approval on a mortgage will help give you a better idea of the areas and properties within your budget. Further, applying for a home loan is one of the most stressful aspects of the whole process, so it’s best to get it out of the way as soon as possible, so you can enjoy the experience.
Although, keep in mind that just because you’re pre-approved for a loan doesn’t mean that everything is guaranteed. For example, things can fall through if your credit score drops, or if you go out and finance another large purchase, such as a new car.
4) Don’t Limit Your Options
Of course, it’s good to be realistic about the type of home you’re looking for, and you may have to compromise on some things, but don’t compromise on the things that are most important to you and your family.
For example, if your plans include having children, you definitely need a home with some extra bedrooms. That is, don’t just buy a smaller house to save money if you know you’ll need more space in the future. Although you may have to be flexible regarding some features, or the exact neighborhood, hold out for the things you really want in a home, and don’t settle for a property just because things line up.
It’s also important to stay open-minded when it comes to searching for the perfect home. You may just be surprised at what you find.
5) Not Hiring a Real Estate Agent
As far as home buying tips go, this one is at the top of the list. Not hiring a realtor is one of the most common mistakes people make when they want to buy a home. But not working with a pro can have lasting consequences.
Realtors have extensive knowledge of the local market, and they’re skilled negotiators that can act on your behalf. A real estate agent also has a comprehensive understanding of the home buying process, from start to finish. And, having an experienced realtor on your side makes it much more likely that you’ll get a fair deal for the location and condition of the property. This is no time to fly solo.
Finding a home you like is not necessarily the hard part. It’s securing a good deal, and getting all your paperwork in order. For instance, if you contact a real estate company to ask about a property and they realize you’re acting on your own without another agent to guide you, there’s a chance they might try to take advantage of your lack of knowledge.
6) Making an Overpriced Offer
Unfortunately, when people go to buy their first home, they are often very anxious and tempted to make an overpriced offer. This usually comes from a place of fear that they’ll miss out.
Additionally, if there are several people interested in the same home, there may be a bidding war that overvalues the price of the property. Even though you may like a house a lot, you should be careful not to make this mistake. If your offer wasn’t accepted for the price your bank approved, and you decide to make a higher offer, you’ll have to pay the difference.
It’s better to study the market value and look for the price of houses that have a similar location and characteristics. That way, you can be sure to make an offer that is fair to both you and the seller.
Home Buying Tips
Visit a Few Times
If you’ve found a property that you like and want to make an offer, first be sure to visit a few times. Most sellers understand how important it is to walk through a home a few times to make sure it’s the one for you. It’s also important to have the home appraised and inspected for any hidden faults. Since the most common problems, such as improper drainage, plumbing or electrical issues, can be detected before you ever place an offer, this is an important aspect of the negotiation process. It will either lower the cost of the home, and provide you with additional leverage, or the owner will need to make repairs before selling.
Explore the Neighborhood
Do you like the area? You might love the house, but the neighborhood is part of the package. It’s a good idea to visit the neighborhood at different times to see how heavy the traffic can be. Or, if the property is located near a school, it might be noisy at certain times of the day. Another thing to familiarize yourself with is the safety rating of the area.
Set a Deadline
It’s also not a bad idea to set a deadline once the house is sold. When will you officially receive the keys to move in? Put this detail in the agreement to avoid misunderstandings after closing the sale. Not taking this step can result in delays. You may find yourself waiting for the previous owners to move out before you’re able to get on with your plans. This can be a frustrating inconvenience.
Hire a Real Estate Agent
We hope these home buying tips were helpful. When you’re ready to get started, contact the Laura Wucher Real Estate Team for the inside scoop on the best East Bay neighborhoods. Call us at (925) 595-8047, or check out some exciting listings by clicking here.