Common House Buyer Traps and How to Avoid Them
“A structured approach to the house buying process can help you stay away from these widespread traps, allowing you to not only cut costs, but also secure the house that’s best for you.”
No matter which way you look at it buying, a house is a major investment. But for many house buyers, it can be an even more costly process than it needs to be because many fall prey to at least a few of the many common and costly faux pas which trap them into either:
- paying too much for the house they want, or
- losing their dream house to another buyer or,
- (worse) buying the wrong house for their needs.
A structured approach to the house buying process can help you stay away from these widespread traps, allowing you to not only cut costs, but also secure the house that’s best for you.
Common House Buyer Traps
This important article discusses the most common and costly of the house buyer traps, how to identify them, and what you can do to avoid them:
1. Making too big of an offer (bidding blind)
What price should you offer on a property? Is the seller’s asking price too high, or does it represent a great deal? If you fail to research the market in order to understand what comparable properties are selling for, making your offer would be like bidding blind. as a If you are not a knowledgeable buyer, you could easily bid too much, or fail to make a competitive offer at all on an excellent value.
2. Buying the wrong house
What are you looking for in a house? More than one house owner has been swept up in the emotion and excitement of the buying process only to find himself the owner of a house that is either too big or too small; or too far from work, or facing a bunch of fix-ups than they really didn’t want. Clearly define your real needs. Put them in writing and use them!
3. Not getting a mortgage pre-approval
For the majority of people, it is fast, easy and free. When you have a pre-approved mortgage, you can shop for your house with a greater sense of certainty, knowing that the funds will be there when you find the house of your dreams.
4. Conditions miss
If a seller fails to comply to the contract by neglecting to attend to some repair issues, you could face some delays in the final closing and settlement. Agree, in the purchase offer, on a dollar amount for an escrow fund to cover items that the seller fails to do in a specified amount of time. Prepare a list of the issues, and check them off one by one as they are done.
5. Hidden costs
When a transaction closes, you will sometimes find fees for this or that sneaking through after all the “fees”. It could be loan disbursement charges, underwriting fees, special property taxes, etc.
6. Rushing the closing
Take your time during this critical part of the process, and insist on seeing ALL paperwork the day before you sign (at least one day before, the more the better). Make sure everything reflects perfectly your understanding of the transaction, and that nothing has been added or subtracted. If you do this on the day of closing, you may run into a last minute snag that you can’t fix without changing the terms of the deal, or (worst) even the sale itself.
Finally, make sure the property has a clear title (no tax liens, leases, etc.), that you have an updated property survey which clearly marks your boundaries, and that you conduct a thorough inspection of the house early in the process.
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