7 Home Buying Mistakes to make, because you don’t know what you don’t know!!
It amazes me how many home buyers are blindly running around with little or no guidance. This article will discuss 7 Home Buying Mistakes.
I have been doing real estate full time for 13 years. It took me 5 years before I really felt comfortable with what I was doing. I spend 50+ hours a week immersed in the business of real estate and have been involved in hundreds and hundreds of real estate transactions. Let me tell you as a home buyer you don’t know what you don’t know! and that is what will make your purchase less than ideal.
That’s why a good buyer’s agent can worth their weight in gold.
7 Home Buying Mistakes
Thinking you are saving money by going directly to the listing agent. Guess what… your just giving the listing agent a great pay day.
I charge the same commission irregardless of whether I sell my own listing or not. So by coming directly to me you have given me a great pay day. I don’t have to split the commission with another agent.
On top of it you are unrepresented and you are taking on a lot of liability yourself. Understanding your “legal” relationship with an agent is very important. When you go directly to a listing agent they work for the seller and owe them fiduciary responsibility. T
The listing agent cannot counsel or guide you in any way that disadvantages their seller.
2- Not understanding the current market conditions-
Most home buyers perception of current real estate conditions are 6 months to a year behind current conditions.
What I find is home buyers are believing current conditions are far behind what they are today. In a turning market 6 months to a year can be huge. Understanding current market conditions will dictate how you look for properties and negotiate on properties.
Try low balling offers in a market that has heated up and your going to be writing a lot of offers with no results.
3-Thinking short term-
As a buyer’s agent I encourage buyers to think for the intermediate and long term. Do not make a purchase based on your immediate needs alone.
Unlike renting where it is relatively easy to change your living situation there is a cost to selling your home. You have real estate commissions and selling costs. For many first time buyers and even move up buyers, they are putting relatively low money down on a home and it is not so easy to sell if you discover that you have not taken all your considerations into buying a home.
Think about space and community needs, now and the immediate future…. is your family going to grow soon, if you are in a career where you change jobs often are you centrally located, etc…
4- Not understanding where you reality lies-
Over the years I have run into many home buyers who are totally frustrated with their home search. They have an idea and they stick to it even though its not working.
What do I mean? Many time a home buyer will be looking in a price range in a community that is non existent or mostly not existent. When meeting with a home buyer the first time we look at past history of what has sold to give them an idea of what is the likeliness of finding what they are looking for.
If the likeliness is low to impossible we consider other options.
For example, I recently ran into a buyer that was insistent on new construction. There budget was 525k and under. The problem was they were looking in Lexington, Bedford, Sudbury, Andover and more. All of the high end communities where there is no new construction anywhere near there budget.
After showing them what they were looking for was impossible we chose other communities where it was possible to get what they wanted. After a year of frustration, we immediately moved forward on a house they loved.
5- Failure to do due diligence–
Home buyers are willing to just take the word of a listing agent or seller about certain conditions of the home. When I work as a buyer’s agent with a home buyer, I tell them to trust no one and if something is important to them to do their own due diligence.
I am not even saying that sellers lie, I am just saying that sellers think they know something when they do not.
For example many sellers selling their home with an in-law apartment will say it is legal when in many cases when I go to the town to verify the claim it is not legal and we cannot even make it a legal in-law apartment. If you are relying on a piece of information that is important to your buying decision, verify the information yourself. it will eliminate many future headaches and disappointments.
Again, working with a buyer’s agent will prevent these problems. First a buyers agent will know when and what to look for and also assist in getting you the proper information.
6- Not understanding the fair market value of a home-
In general a home is worth what it is worth regardless of your situation as a buyer. If a house is listed fairly at $350,000 it isn’t worth $300,000 just because you can’t get financed for more or you have to build a garage because you really want one.
Determining the fair market value of a home will determine how you negotiate for a property. I recently had a buyer tell me a house he wanted to purchase was only worth $300,000 on a $350,000 list price.
He wanted the house and he could afford it. I told him it was worth every penny based on my research and would probably go 10-20k over asking. My customer insisted it was only worth 300k and tendered an offer for such. He didn’t get the property and it went well over asking with over 12 offers on the property.
I asked him afterwards why he thought the property was only worth 300k. He said that is what the tax assessment was. I then explained to him that tax assessment had nothing to do with the value of a home based on selling in an open market.
7- Not knowing how to negotiate-
Finally the last of 7 home buying mistakes. There are many facets that successfully go into negotiating a real estate deal.
In today’s real estate market the tables have turned and the sellers are in control. The last few houses I have listed every home had multiple offers and all but two went over asking.
When negotiating it is important to understand the true fair market value of a house as well as what is trending in market conditions, combined with your desirability of a house. Blindly low balling an offer will lead to a lot of heart ache and wasted time and effort. A buyers agent can help you craft a negotiating plan that will increase your odds of having your offer accepted.
These are just 7 home buying mistakes. Of course their are many more to be made. The great part is you can have help…. lots of it, by working with a seasoned Massachusetts Buyer’s Agent. A buyers agent is a counselor and an advocate. Think of a buyer’s agent as a home buying consultant, not a sales person.
This article, You Don’t Know What you Don’t Know! 7 Home Buying Mistakes, was written by Kevin Vitali of EXIT Group One Real Estate. I have been practicing real estate for 14 years and have the experience of hundreds and hundreds of closings under my belt. if you would like to maximize your next home purchase give me a call at 978-360-0422.