Home Buyer Mistakes That Can Cost You
The real estate market in south Alabama is continuing to grow at a strong pace with hundreds of home sales with both pre-existing properties and new construction across the area. Interest rates are still low and home prices in our area are very affordable compared to much of the country. As we come to the end of the summer season, we often see home sellers negotiate a little more with buyers as the demand tends to lower "some".
This is an exciting time for home buyers so check out our list of common mistakes that buyers make before you go house shopping.
Home Buyer Mistakes That Could Cost You
Buying a Home Without a Buyer's Agent
I get it. You've been saving your money and working on your credit. Now you are finally ready to buy a new home. You drive around neighborhoods that you like and see this great property that you want to get more information on so you call the name on the sign in the front yard.
Why is this a mistake?
Most people don't realize that the listing agent works solely for the seller and they have a legal obligation to look after the seller's interests. The best way to go about buying a new home is to have your own representation by working with a buyer's agent. It's pretty simple. Contact your IXL Realtor and have them go to work for you. When you work with a buyer's agent you have someone that has a duty to "watch your back" and protect your interests alone. The listing agent then works for the seller and the buyer's agent works for you. The best news is that you don't have to pay them. The seller pays all commissions.
Buying an FSBO without a Realtor
When sellers want to save money on their sale they sometimes want to sell For Sale By Owner (the reasons not to do this is another article for another day). Buyers sometimes think that they will save money buy purchasing a FSBO but that's not the case at all. The seller is more than likely not thinking about you but how much more money they will keep. Here are some reasons why you should use a Realtor when buying an FSBO:
- FSBO sellers typically work with buyer's agents anyway
- The seller is probably not seasoned at pricing their home correctly. You could be overpaying.
- There are dozens of legal clauses, disclosures, disclaimers, and timelines in a real estate contract. You need a professional who does this every day.
- Again, the buyer's agent is looking out for your interests. The seller will of course be thinking about their own.
- An agent will likely catch things that you would never think of like certain home inspection repairs, resale value, etc.
Foregoing the Home Inspection
This mistake happens when buyers want to either save a few hundred dollars or they're purchasing new construction. Always, always, always pay to have a home inspection performed by a licensed inspector no matter what the house looks like or how old it is. Skipping the inspection could literally cost you thousands of dollars in the future.
Many folks think that if you're buying a brand new home all of the inspections are done by city inspectors so everything should be fine. Most of the time that is the case but people do make mistakes. Having another pair of eyes analyzing your property objectively is definitely in your best interests. Although we have great contractors and county inspectors in our area, there have been numerous occassions where the home inspector found a problem that was missed.
Waiting too Long to Improve Your Credit Score
The better your score, the better interest rate you will have when getting a mortgage loan. Did you know that just a half a point difference in your rate could mean thousands of dollars to you over the course of your loan? It takes some time to raise that score so start working on it early. You will thank yourself later.
Not Knowing Other Costs of Home Ownership
This mistake is often made by first time home buyers because they've been used to renting for awhile. Along with the mortgage and interest payment, here are some other expenses that you would need to figure into your monthly costs:
- Property taxes
- Home owner's insurance
- Home Owner's Association fees
- Routine maintenance costs
Jumping Into a Purchase Too Fast
Sections of our real estate market can move real fast, especially in places like Daphne. So it's easy to find a house that you love and move quick on it thinking that you may lose it to another buyer. When you do find "the one", take a breath! Get with your Realtor to determine how the sellers have priced the home. Again, you could lose thousands of dollars by not doing your homework.
Changing Your Finances During the Sale
Before you go house shopping, you'll get pre-approved by a local lender for a mortgage. They are going to make a decision to approve you based on your income, credit score, assets, and debt. So, it's imperative that you don't make any major changes in any of these areas while you're under contract. The underwriter will run your information again just prior to closing so you don't want to show more debt, open new credit accounts, or change jobs.
Are you ready to buy a home in lower Alabama? Get with your IXL Real Estate agent to help you explore your options and guide you through the process of home ownership.