"When most homeowners wish to sell their property, one of the first things they do is to secure a real estate agent. However, when many people who set out to purchase a home often start to do so by themselves, without representation. Many buyers go online to look for great deals, or visit open houses themselves, without applying for a buyer’s agent first. Unfortunately, this approach can cost home buyers a great deal of money and can lead to house buying disasters that take buyers years to recover from -- both financially and emotionally.
It is true that buyers are becoming more Internet savvy and more money smart. Many get estimate values of homes from web sites such as Zillow, or spend their time looking at County Assessor websites to find the assessed value of properties, as determined by the local taxing authority. However, this information, while valuable, will often not provide a buyer with the information they need to make a truly smart purchase. Many buyers, for example, do not realize the high rate of errors and mistakes that occur on these web sites.
Many buyers assume that they can save 3% immediately by negotiating the 5% to 7% selling commission that is often built into the list price of a property. However, many buyers quickly realize that developers will often not negotiate much with an unrepresented buyer, even if they had actually planned on paying additional money for a commission. The same is true of many sellers -- they are not always willing to negotiate with a buyer who is unrepresented, even if they were planning on negotiating with a buyer's agent. In many cases, where a homebuyer is using an agent in order to sell the property, that agent may accept a lower commission than was originally agreed upon. In this case, the unrepresented buyer does not get any sort of discount. The seller simply pays less commission to the listing agent, and the price remains the same.
For all these reasons, getting a buyer's agent is simply a necessity in today's real estate market. A good buyer’s agent can have access to accurate and detailed information about the market value of the property. A good buyer’s agent will also have the well-developed negotiation skills that can get a buyer an actual discount on a property. This negotiating skill alone is often enough to pay for the price of a buyer's agent in the first place. A buyer's agent is also often able to complete extensive research on the MLS. For example, a good buyer’s agent will use this database to compare recently sold properties with the property that a buyer is interested in buying. This can help the agent determine whether the price compares favorably to current market conditions. More importantly, an experienced buyer’s agent is also invaluable in helping a buyer negotiate the entire buying process. From helping to locate a good lender, to helping in the inspection and assessment process, to helping the buyer determine what their needs are, a buyer's agent can take a buyer from initial desire to buy a home right down to negotiating the contract. Simply put, having a professional, experienced buyer’s agent on your side ensures a good house buying experience."
Most people these days use financing to afford their home, and a very common mistake that is made by many home buyers is making a major purchase, such as a car, not long before trying to buy their new home. This may not sound like a problem initially, but lenders use something called the debt to income ratio to help determine whether or not you can actually afford a home that is in a certain price range. Unfortunately, by increasing your consumer debt for purchases like a car or some other installment payment, you only decrease the amount of house that you can buy through most lending institutions. So avoid this mistake and eliminate all major purchases as much as possible before purchasing a home.
Another common mistake is changing jobs just before buying a home. Again, lenders don't like to see this. They prefer instead to see consistency at the job, so do your best to stick it out at your job, at least until your home is bought and the papers are signed.
If you happen to be buying your home as a for sale by owner deal, a big mistake that you want to avoid is to be careful not to give any down payment money to the homeowner themselves before the transaction is actually completed. Unfortunately, some unscrupulous homeowners have taken the down payment money that they have received and spent it before the deal was closed. If for any reason the deal falls through, you can imagine how difficult it would be trying to get your money back in such a situation. The wise course of action is to put the down payment in a trust fund overseen by an attorney, so that access to the money cannot be gained by either party until either the house closes or the deal falls through.
Believe it or not, some home buyers actually forget to arrange to have their utilities activated in their new home before they move in. This can lead to some very uncomfortable days spent in your new home that are unnecessary. So make a note to yourself to both arrange for turning off utilities at your old residence, and getting them turned on in time at your new home.
Having a good real estate agent to look out for your interests as you buy your new home is an important asset that you don't want to overlook either. It's their job to keep up with all the details of the deal from day-to-day, and keep everything moving smoothly on track toward closing. They can help shield you from much of the frustration and day-to-day angst associated with buying a new home.
Some home buyers fail to stay up with the requirements of the lender as the home progresses to closing too, and then find themselves way behind in the process at the very last minute. Sometimes this can lead to delay or even cancellation of the house closing, so take care of your end of the deal by staying on the same page as the lender all the way through the process.
The more education that you have about possible costly mistakes that could be made in buying a home, the more chance you have to keep the whole home buying process moving along smoothly and quickly toward a successful close.
Both Wes Cox & Jim Johnson are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Wes Cox has sinced written about articles on various topics from Finances, Tanning and Home Buyers Guide. Austin Realtor David Bouthot is your authority. View