If your path through life is similar to most American adults, then buying a home is going to be the biggest individual financial transaction you ever make. Getting this decision right is of paramount importance considering the consequences at stake and how you might have to live with them for decades. Learn the most important gotchas to avoid when buying a home.
Purchasing a Home That Doesn't Thrill You
If you have concerns over a home that make you want to submit a low-ball offer, then you might be in a situation where you either offend the seller or wind up buying a home that verifies your instincts later. After you take over as an owner, you'll start seeing what made you hesitate about buying it enthusiastically, even if you didn't know what it was at the time. Offending sellers will usually kill any chance of buying their home, and you might get a bad reputation on the local market with property agents.
Thinking Everything Is Negotiable
If you watch enough HGTV, then you might think that negotiating is going to happen in every home sale. In actuality, many sellers price their homes competitively to draw in multiple offers and start a bidding war. Underbidding can mean totally losing out on a home price to sell fast.
Falling for the Flash
Most homes staged for selling will have flashy details that seem enticing. They might be genuine features, but they might also be distracting you from the ugly truth behind the details. Look at the actual bones and structure.
Save Up a Huge Down Payment
The bigger your down payment is, the less you'll pay back on your mortgage. You'll also get a better interest rate and possibly more offers from more lenders.
An average of 8 percent of all home sales wind up falling through. In some markets, the contract failure rate is over 10 percent. Financing is the most frequent reason for this happening. Pre-approval letters might seem nice, but until a lender actually provides a final declaration of 'clear to close', then you might not wind up with the financing that you were expecting. Anticipate underwriters to ask you for insane amounts of paperwork, even when you thought things were sealed.
Passing Up Early Homes to Find Better
If you're early in your search process, you might think it will take time to find 'the one'. Sometimes it shows up very early, and you might pass on it with the assumption better options will turn up later. If the right home pops up in front of you, make sure it's the one and then pounce on it. It doesn't matter if you've been looking for a day or a year.
Remember That Markets Change
Look long enough and you'll see market changes in prices. What once looked good might now be something you can no longer afford, and what was once out of reach might now be in your range. Keep this mind during the contract phase, as well, since market changes might swing asking and selling prices and even your financing.
A big part of buying a home, either new or new-to-you, is the allure of making it your own place. You'd like to think that if you own it that you can do whatever you want with it. Unfortunately, many homes might be part of neighborhood associations that have limitations and rules you can't even imagine. That can include everything from what colors you can paint the home to who you can resell to later. Learn who your potential neighbors are and what things are like in a given subdivision.
See the True Potential
It's rare to buy a home that you won't have any wish list of projects for. Embrace the idea of finding your dream home not by buying one, but by buying something with potential and then manifesting your perfection project by project. It's best to not spend all your money on the actual home so that you have budget remaining for your inspirations and aspirations after you actually live there.
The End Is Just the Beginning
Perhaps the biggest single gotcha of all home buying is the assumption that your offer on a home being accepted means you're done. It doesn't. This is actually just the start of a whole new process. Financing, inspections, closing costs, and a mountain of paperwork all await you. Don't go into this without a property professional you can trust.
Buying the right home gives you a place to enjoy life and build financial security and wealth for many years into the future. Set the right foundation by avoiding these crucial gotchas when you are trying to find homes for sale.