Common Home Buyer Blunders

I know that there have been a ton of articles written about the do’s and don’t of buying a home, purportedly directed at the first time homebuyer. Well – first, second or third time around – errors are still made. So I’m going to skip the usual money management approach, as I am not a financial advisor.

I am however a buyer’s agent, meaning I have always represented buyers and in hindsight I am glad to have. So as a home buyer’s agent, I’ve witnessed or discussed with my colleagues the blunders made while actually in the home buying process. Things that are actually counter productive to the process and least likely to produce a stress free (or as close to that ideal as possible) experience all the way to the time you have your house warming event.

I am assuming however that you have been pre-approved before home shopping and you know and feel comfortable with the mortgage amount and estimated monthly payments. Home shopping without a preapproval is like going to the mall without your wallet. Maybe you’ll underestimate how much you have to spend, most likely you will overestimate and then have to go through the emotional pain of reconciling that price with the home you fell in love with as it slips from your grasp.

1. Knowing what you want with the healthy expectation and realization that there is no perfect home. You should know what your ‘can’t live without’ concerns are as well as the ‘would be nice to have’ conditions are. If it’s in the vicinity of a particular school or district, easy access to freeways, close to work, or a particular area – define your conditions and then stick to them. If you need a bedroom large enough to hold a certain amount of furniture, decide in advance if this is important enough to give up a family room or lot size.

2. Seeing too many properties. If you’ve been out to preview 35 homes and you still haven’t found one that you’re ready to make an offer for – review #1 above. After a certain number of homes – it’s difficult to remember how you actually felt about the first or second home that you visited. Even with the most copious notes, whether you could visualize yourself in that home will have escaped you. Oh – and do take notes. I provide my clients with materials to take notes with and few do. I wonder what the conversation later on with the loved one – ‘no, the one we liked today had the island in the kitchen; the one you’re talking about had the steep back yard! Take notes – a few comments at least about favorable homes. The homes that are out of the question – a big X will do.

3. Low balling. Now this is for distressed and non distressed properties. The very real danger of low balling homes that have equity is that you could very well be forcing the seller into short sale conditions where the lien holder would have to take less than is owed – hence now a short sale. Seller’s agents are more than aware of what homes are selling for in the area and based their advised list price to their clients. Your buyer’s agent has access to the same type of information as well as mortgage and purchase history and can equally advise on reasonable offers.

4. Sitting on documents for too long. Home buying involves timelines for each stage of the process from acceptance of counter offers, inspections and appraisals. If you don’t have access to a fax machine in the course of your normal work day or at home, scour the area for an outfit with fax access. There are a number of options – office supply stores (Staples, Office Max, Depot), pharmacies (Walgreens) and shipping and mail centers. If you happen to be a member of a shrinking number of people and don’t have an email account – sign up for one immediately and never disclose to anyone that it is your first one. Seriously, what ever your opinion of an electronic world, it is here to stay and you will need to embrace it if only for the sake of this transaction.

5. Nitpicking the small stuff. This is particularly true in the inspection response phase. Of primary importance is addressing the items of the inspection that affect functionality and value of the property. This would include the roof, foundation, plumbing, electrical and heat. Secondary to that are things that relating to conveniences and appearances. The interior paint, flooring (in most cases), fixtures and window coverings. Your inspector should be able to provide detailed information about the life expectancy for most items as well as information re: the ease or complexity involved with minor updates. Once again, no such thing as a perfect home and most are a perpetual work in progress.

6. As you get closer and closer to closing and alternate between dreaming of yourself living in your new and the fear of an equally new mortgage payment, don’t allow yourself to drift too far in either direction. Exhilaration may tempt you to go off on a tangent and start re-decorating and furnishing your new home before you’ve gotten the key. Particularly in times like today where lenders are particularly skittish when it comes to home loans. Don’t add any thing to your debt load prior to closing, I repeat don’t add to your debt. Even those ‘buy now with no payment for a year’ offers. The debt total is still added to your credit and could shift your ratio and prompt changes in your loan. Wait – you’ll have plenty of time to shop and redecorate in the months and years to come.

7. Finally – be honest and open with your agent. If you’re not comfortable with something, let her/him know. The earlier the better – preferably before the inspection timeline has expired and you still have the option to walk away from the deal without penalty. Your agent then won’t have to scramble and negotiate your way out. The home buying process is a two way street and agency law has developed to ensure that the interests of both parties are protected and considered.

Buying a home does not have to be stressful or draining. In fact, it can be pleasant and exhilarating. You’re moving to another chapter in your life when you can set the stage with the colors and textures of your own choosing. The place that you return to at the end of your day for nurturing, relaxation and rejuvenation can evolve into your particular brand of oasis. Your buyer’s agent can only aid in that endeavor with your cooperation and support. The above are just a few tips to making it so. Happy house hunting.