Top Ten Potential Mistakes To Avoid When Purchasing a Home

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To the great relief of many people, both inside and outside the real estate business, it seems like the worst part of the depressed real estate market may be behind us. It's dangerous business attempting to predict market movements (see below) but at least in some parts of the USA it does seem that buyers are beginning to emerge from hibernation. If you are looking into purchasing a home, here are the top ten mistakes that you should avoid before closing the deal.

1. Not Getting a Mortgage Pre-approval
Getting pre-approval for a home loan is an important first step for potential buyers. Obtaining a mortgage pre-approval will give you a much better idea of the total mortgage amount you can readily borrow. Being pre-approved also indicates that you are serious about buying. Most sellers with worthwhile homes won't even consider an offer unless it is accompanied by confirmation of pre-approval. Also, should any problems with your credit worthiness surface it is better to find out about them at the beginning, when you still have time to make changes to rectify them. Encountering a credit issue after you have already committed to a home purchase can be quite upsetting.

2. Not Hiring a Buyer's Agent
Unless other plans are made, with nearly all full service real estate offices, the buyer's agent works for you at no cost to you. His or her commission is paid by the seller's broker after the sale is completed. Consequently, it is in your best interest to hire your own representation - a buyer's agent - rather than working with the seller's agent. The seller's agent is obligated by law to act in the seller's best interest, not yours. By engaging a buyer's agent you can level the playing field since a buyer's agent is required to serve in your best interest.

3. Working with the Wrong Real Estate Agent
Before working with a buyer's agent, you should meet with a number of different agents. Ask for the names of earlier clients so you can check references. Do not limit yourself to agents with large brand name companies or so called "top-producing" agents. Also, before hiring a friend or family member who is an agent, remember that if you are unhappy with the service being provided, it's considerably easier to drop an agent who is a "stranger".

4. Not Realizing the Length of Time the Process Takes
Buyers, and sellers, sometimes believe that the process of buying property is shorter than it actually is. There are a wide variety of things that can introduce delays. Sellers can delay formally accepting your offer, you may encounter problems selling your old house, financing may be held up, repairs may need to be completed, problems with getting a clear title to the property may arise, etc. Murphy's Law always to surface when trying to close a deal promptly. Be sure to allow at least two to three months to complete the sale.

5. Believing the Appraisal and/or the Tax Assessment Are the Same as the Actual Value.
Appraisals and tax assessments are intended to be objective approximatioins of value. However, different appraisers can arrive at considerably different valuations. Buyers should have their agent conduct a comparative market analysis (CMA) to get a better idea of the house's current market value before submitting an offer to purchase.

6. Attempting to Time the Rising and Falling of the Real Estate Market
Attempting to time a purchase with when the market has hit it's low point is just about impossible. I'd be a very wealthy man if I had that ability! Both buyers and sellers need to realize that a sound real estate investment is always a long-term investment.

7. Ignoring the Facts When Searching for a Dream Home
When buying a home, if you only follow your heart and not your head, you will probably be in for some nasty surprises. That fabulous home may look like your dream home, but make sure to think about everything involved. Consider such everyday issues as the impact a large mortgage will have on your finances, commuting issues, the specifics of local schools and shopping facilities, the cost of property taxes and homeowner association in addition to other quality-of-life matters of home ownership. That fabulous home may not be worth the turmoil it causesyou and your family.

8. Failing to Remember That Timing Is Everything
As you can most likely imagine, paying two mortgage payments can be extremely difficult to handle. When thinking about selling your current home and purchasing another, remember that the sale of your present home is the more essential of the two transactions. If you would be unable to make payments on two home loans, If at all possible, try to secure the sale of your current home prior to committing to buy a new one.

9. Not Reading the Contract.
Don't forget that a purchase contract is a legally binding document. Not understandingwhat you’re agreeing to can be a huge mistake. Review the document carefully before signing and obtain clarification if there is something you are uncertain about. Do not be afraid to have your attorney review it,if you wish. Be certain that it contains everything you it should, including who is paying for what. Verbal agreements should be included, in writing, in the contract. Ensure that your agent takes a proactiverole in the developing of and negotiation of the contract. Rushing throughthis step can add delays and result in financial and emotional pain.

10. Not Conducting a Criminal Search for the New Neighborhood.
Agents in most parts of the country are not required to advise buyers that there is a sex offender or other illegal activity in the neighborhood. Check with the local police department or sheriff’s office to find out how to review local sex offender and related criminal databases. Additionally, the internet has made this research much easierin recent years. There are many online sites for gathering this information. Visit the website www.backgroundcheckpoint.com for additional information about some of these investigative resources.

Article Source: http://depositarticles.com/

Jim Navary has been a freelance writer and researcher for more than thirty five years covering a wide range of subjects. He is also a licensed real estate salesperson in the Commonwealth of Virginia featuring Prince George VA real estate and Fort Lee VA homes for sale.

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