Given the intricacy of buying a new home, it is important to be informed about the process before even heading out on the market. There are common mistakes made by home buyers, and knowing them as well as learning from others, should help you make the right choices. There are a ton of great benefits to owning a home, like equity and tax benefits – not to mention a place you can call your own. And, this is why being informed about the process is crucial to long term stability, success, and ultimately – gain.
Whether you are a new home buyer or not, this list of common mistakes will help. We know and appreciate the excitement and pressure of making the decision to buy. In fact, it might be one of the most stressful decisions you ever make. And, this is all the more reason to be informed. Take a step back and really evaluate the process with your trusted realtor before getting caught in a mistake that may cost you.
Based on my experience, the following are the most common mistakes made by home buyers.
#1 Don’t Fall in Love at First Sight
Buying, is an emotional decision. And as a result, it is possible to overlook certain things that in a ‘non-emotional state‘ wouldn’t be ideal. First and foremost, understanding the market is key. This may involve your own research, speaking with those who have purchased homes recently – or the best option is working closely with your realtor.
It is important to understand the inventory so to speak. You might find yourself desperate to make a purchase and find that everything is exactly what you wanted – or so you think. A responsible realtor will be able to show you comparable properties, and help you work through the value of what is available.
Having an objective point of view, from a realtor, should be aligned with your excitement to buy. This will help you fall in love with the right home – for you.
#2 Always Look for that Better Deal
So, you have done your research – you are familiar enough with the market, your wants and needs. Perhaps you have looked at a few homes and may even be leaning towards one in particular. Great – don’t wait. When you find a home that objectively makes the most sense, both in terms of value and what you want, waiting can be a monopoly.
Chances are, if you feel good about the home, others do too. I would imagine you do not want to end up competing for the home, and this is definitely a possibility if you don’t take action quickly.
Waiting, may also affect interest rates going up, inventory might change. Way too many variables to risk waiting when you could be making an informed, decision to make an offer. Remember, you might find yourself waiting for a deal that will never come. Again, this is where your trusted realtor should offer guidance and support. There to listen, but also there as the expert.
There’s no conventional advice for this timeline unfortunately. The pace of home buying is determined in part by the market and the seller’s motivation. But most real estate professionals agree that buyers shouldn’t wait too long when they find a house that’s a good fit.
#3 If You Think an Estate Sale, Bank Owned Property, Sale by Owner, etc. Means Great Deal – Think Again
Common misconceptions (even mistakes made by homebuyers) is the assumption that because a home is for sale ‘by the bank, that it will be a better deal. Again, through your research you will often notice that most homes will almost always sell near market value.
There may have been a time that these different sorts of sales or transaction were favourable for the buyer (and seller) this is not commonly the case. Because, ultimately the owner will want to earn their own value, so to assume that costs will be significantly lower is naive. Now given, there are exceptions to every rule. However, working with your realtor you’ll be able to determine if this is in fact the case.
Overall, these properties are not automatically bargains. Banks are in business to make money, so they price their homes competitively. Some properties are discounted because of severe damage or location, while others may not sell for much of a discount at all. An independent appraisal to determine a home’s true market value may also be a great option.
Additionally, understand that these properties may also have been vacant for months or even years, generally are sold “as-is” with no warranties of any sort. You definitely want a professional involved in this type of transaction.
Similar to the other common mistakes listed above, research and being informed is the only way to go.
#4 Coming in Low (low-balling) versus Submitting a Reasonable Offer
You, are looking for a great deal – for the value. Excellent. Keep in mind, it is exactly what the seller is looking for too. When submitting an offer, you might look at it as your way of showing ‘respect’. Consider a few things before making your offer;
- The sellers motivation for selling the property
- Consider moving attention away from the price
- Be thorough in your offer, don’t leave things out
- Consider counter-offer scenarios
- How long has it been on the market?
Ultimately, you want to at he very least, make a case to why you believe a low-ball offer is fair. You want to air on the side of caution that, the seller worked with a trusted realtor, like you are – and listed the price at what they felt was optimal for them. Coming in too low, can almost be viewed as insulting.
Chances are, you have already determined your ‘top’ price point, and the seller, has likely determined their ‘bottom-line’ – an ideal situation would be both of you meeting somewhere in the middle.
Keep in mind, selling a home can be equally as stressful as buying – making the transaction as fair, and smooth as possible for all parties is optimal. Negotiations are much simpler when the respect is evident – on both sides.
Before you go …
Lastly, if you have made any of these common mistakes made by home buyers, don’t worry. You, are not alone. Although exciting, the purchase of a new home can be incredibly overwhelming. Whether it is downsizing or upgrading, the stress is no different. Human behaviour suggests we are emotional buyers – so falling in love at first sight, or jumping the gun on an offer, or stepping too far back – are common. But, can be avoided.
I hope that in sharing some of these suggestions that the process will be easier moving forward – or for next time.
I want you to come away with one main principle. To avoid mistakes made by home buyers, you being informed, and working with the right realtor can, and will, save you a ton of time. In addition, could also save you a ton of money and stress. Being excited and emotional is all part of the process – and likely what becomes the driving force. So, equipped with that AND knowledge will have you in the house of your dreams in no time!