In my 19+ years of helping buyers move to Westlake Village, Thousand Oaks, Agoura Hills, Oak Park, Newbury Park, Simi Valley, and Moorpark, I have yet to have a transaction without a few bumps in the road. With all of the different people involved, issues will arise. My job is to anticipate potential pit falls and help buyers avoid them. Here is a list of 7 common mistakes buyers make.
1. Not Speaking to a Lender Early On
Until you talk to a lender, you really don’t know what you can afford. Also, speaking to a lender early on gives you time to fix your credit (if necessary) and make sure you have the proper (and seasoned) funds when you are ready to make an offer. Plus, few sellers will consider your offer if you don’t have a pre-approval.
2. Under Budgeting
Times have changed. Banks actually want to make sure you can make more than just your first payment and they want real proof. You’ll also need funds for closing costs (usually about 1-2% of the loan amount), plus your inspections (about $500+), not to mention moving costs and some home improvements.
3. Offering Too Much or Too Little
There is no special formula for determining what to offer. There are many factors involved including comparable sales, time on the market, and whether or not there are other offers. Offering close to the asking price on an older listing doesn’t make sense and neither does a low ball offer on a new listing that has multiple offers.
4. Not Understanding the Difference Between an Equity Seller and a Short Seller
An equity seller is a standard sale when the seller has a vested interest in the final outcome of the sale. A short seller doesn’t really care (within reason) what the home sells for; it’s up to the bank to determine the final price. If you’re buying a short sale (and there’s a good chance you will be), plan on it taking longer and the terms being dictated by the bank.
5. Making a Large Purchase During Escrow
Big mistake! Lenders are now required to check your credit again during your escrow (here’s a post I wrote about it). Feel free to buy that new big screen, just make sure it’s at least a day after the close of escrow.
6. Having Their Brother-in-Law Who Hasn’t Sold a Home Since 2003 Represent Them
Real estate is a full time, local business. The market is in a constant state of change and each neighborhood has its own specific nuances. The laws and regulations change frequently too. If you want a friend or family member to represent you in your purchase, that’s understandable, just make sure he/she is active in today’s market and in your area.
7. Not Meeting With an Agent Before Looking For Homes
Calling the listing agent of every home you see is not a good approach to finding your home. You want an agent that specializes with buyers and will proactively represent your needs. I love educating home buyers and I love the process of finding a home. When you are ready to get started, please contact me to schedule a consultation.
