These may seem like common sense to the seasoned real estate buyer, but you can’t believe how many people make these same five common mistakes year in and year out in buying real estate.
So without further ado, let’s get to the top five mistakes buyers make in the real estate transaction.
1) People Over Buy. Yes, this is the exact problem that got many Americans in trouble and started this housing crisis. Buying too much home for your income happens less these days because of the recession and crash, but it’s still the number one problem in home buying. Remember, a good general rule is to add up all of your expenses including the new mortgage and it should not exceed 36% of your total monthly income.
2) Misplaced Trust. We all know someone in the real estate business. Chances are, you were connected with your real estate agent from a referral. Even if the referral came from a trusted source, don’t be afraid to do your own research on the agent, mortgage lender, etc. Ask questions and conduct a good interview a maybe a background check.
3) Oral agreement. Get it in writing for everything and keep a file with all of the paperwork. Even when you are talking about things over the phone with an agent, ask them to send you an email detailing what you just talked about so you have a paper trail and documentation. He said, she said never turns out well for anyone.
4) Skipping the fine print. Read everything and read it again. I know it can be tedious and difficult language to follow, but if you don’t understand it, hire a lawyer to look it over for you. The cost won’t be much compared to being stuck with a bad deal on a home.
5) Betting on resale. Be careful about buying the nicest, most improved home on the block. Remember, the homes on the block are going to sell according to the market average for size and features. If you think that you are going to cash in when you go to sell the house because it’s loaded, you might want to think again. Chances are, you may not get the cost of the improvements back when the time comes to sell.