Whether you're getting married, looking for more space to raise a family, want to stop renting and start investing, or maybe you're looking for a rental property you can make some extra cash on - The reasons people have for wanting to buy a home can vary. However, whatever your reason, you'll want to be sure to avoid these top 4 mistakes (trust me, you can't afford to make them!)
#1: Let's start by talking about "Agent Hopping" - This is something you'll want to avoid doing when it comes time to purchasing a home. To position yourself for success when it comes to finding and getting an accepted offer on your (insert correct answer: dream home, starter home, investment property, etc), you're going to want to have someone representing YOU! On the flip side, let's say you don't want to be tied to anyone specifically, you think you know enough about the process and want to be in control. Well in that case you're most likely going to be contacting the agent who is listing the house you are interested in. That means you won't have anyone to educate you about the process (it's not HGTV, so unless you're a licensed Real Estate Agent, there are going to be things you don't know). You won't get detailed information on the market, recommendations for how much to offer or any red flags you should be aware of.
You'll want to interview agents before you start looking at homes so that you can find someone you trust to be your advocate throughout the entire process. Buying a home is often the biggest financial investment you will make and you'll want someone who works in this industry to be your advocate along the way.
#2: Miscalculating the costs associated with buying a home - Purchase price, check! Down payment, check! All set? Not so fast! There are other costs associated with buying a home that you'll want to be aware of well before the time comes. Your down payment could potentially be the largest expense but there is also the earnest money deposit, the home inspection, the appraisal, radon testing and other expenses you'll want to talk to your Real Estate Agent and lender about.
When it comes to costs associated with the financing side (in addition to your down payment), you'll want to check with your lender to find out an estimate on your closing costs and how much you'll need up front for homeowner's insurance and taxes. You can also see if there are any first time home buyer programs that may help offset some of these costs. Sometimes, the lender will allow you to ask for a certain percentage in closing cost credits from the seller. Depending on your situation, this is something you could include in your offer to purchase to help offset some of your closing costs. Make sure to discuss these options with both your agent and lender so that you fully understand how they work and how best to use them.
#3: Skipping the Home Inspection - "But I'll save $500 if I skip it and I'd rather spend that money on new home decor from West Elm!" - Pretend Buyer. Home inspections are not necessarily required in order to purchase a home. So during the transaction it might seem intriguing to some buyers to skip the home inspection and save some extra cash to put towards the home itself. However, I highly, highly, highly (I REPEAT - HIGHLY) advise against skipping the home inspection. Number one, you're going to want to know about any major issues the home could potentially have. You'll also want to know about smaller repair items that need to be addressed along with any future maintenance issues to watch out for. A home inspector is there to spot the major red flags that could end up costing you a lot of money if you don't figure them out before closing. Ask your agent for home inspector recommendations or feel free to do some of your own research. You can use whoever you feel comfortable with as long as they are licensed in your state.
#4: House hunting without a pre-approval - I'm sure you've heard this one as your eyes roll back into your head and you think "enough is enough with the pre-approval!" As much as it may sound like a broken record, it is a big deal and you'll want to know why! For starters, most agents won't show you a home without a pre-approval letter and most sellers won't entertain an offer without one either. So if a house comes along that happens to be your dream home and you're not prepared, you could miss out just because you didn't take the time to get pre-approved (and trust me, it doesn't take long).
Lastly, if you haven't found a lender you want to work with or gotten pre-approved, you may be shopping outside of your budget. You might know what your monthly budget is but there are several other factors taken into consideration besides your paycheck. Have you checked your credit score lately? Do you know your debt to income ratio? What about the various types of loans and what they entail? Some will require higher down payments than others. If you start searching for houses listed for more than what you can actually afford, you'll set yourself up for disappointment when you realize you can't buy the house with the awesome home theater you had your heart set on.
If you're ready to jump into the home buying process right now, make sure you're avoiding these big mistakes! If you want to discuss this in more detail, feel free to reach out and we can set up a time to grab coffee (your go-to coffee order is on me!) I love teaching buyers about the ins and outs of the home buying process to ensure they have the best experience possible and avoid any mistakes that can throw you for a loop!
Located in the 11 county metro, The Trust Team is a leader in the Minnesota real estate market. The Trust Team was founded in 1978, yet represents the best of traditional market knowledge, cutting edge technology and top -notch customer service - all provided by 10 of the most experienced agents in the industry.
We combine the very latest in proprietary internet marketing, and make use of the most current and relevant real estate and social media platforms. We are considered leaders and innovators - always willing to try what is new, and use what is proven. Joe Niece, has more than 3000 past real estate clients, and is an information and renowned internet Guru. His wife Angela Niece and partners, Nikki Moeller, Matt Wolfe, Mike Finstad, Joe Jones, Cory Kingbay, Mary Ellen McGlone, and Stieg Strand have created a most unusual real estate team. 2015 was our best year ever with 498 satisfied clients which gave us the honor of being the #2 team in all of Minnesota. We want your business, promise your complete satisfaction and we are committed to your success !
Jilly walks us through her amazing DIY project! She put together a bar
"I tried to sell last year and I was unsuccessful so I decided to get some new opinions on what I should do. I interviwed two agents when I was getting ready to sell my home the second time. Angela and the other top person in the area. I was very impressed with both and both she and Angela came up with similar values for our home. The problem was that Angela's value was with me doing three projects and the other Realtor told me that I did not have to do anything. My wife and I were leaning on going with the other Realtor and Angela asked if she could come over and go over a few things with us.
She pulled out the comparable homes that we had picked together when she first met with us and she asked us to look at the pictures. All of the things that Angela was telling us we should do were done on those homes.
She then asked us to think about the signs that we have seen in the area that were his and the signs that we have seen in the area that were hers. Then she asked us one really good question. she said "Do you want to list with the agent that has his signs go up, quickly have a sold sign and then the sign disappears or list with the agent that seems to have the signs up forever. It seemed really logical but we had never thought about it that way. I had always thought about how many signs I saw for the other agent. It made sense that the other agent was not doing more business than, it's that her signs stayed up much longer.
We were convinced to list with Angela but we told him that we thought that our home would be able to sell without doing the things that Angela had suggested. she told us she would market our home like it was the best thing on the market. A month later our home had not sold. she told us we could do the things that she had suggested or drop the price to match the value.
Being a stubborn German, I did two of the things that Angela suggested but not the third. Three weeks later, Angela was talking to me about feedback. she told me that we were going to hurt ourselves unless we decided on one path or the other. Either finish the last project or drop the price before we were stale on the market.
I finished the last project, we went back on the market and sold three showings later. I tell my friends that it was just luck but I know different. Everything that Angela told us she was going to do, she did. Everything that Angela told us was going to happen when we first met with him happened. The price we would get for our home if we did the projects she said we needed to do, we got (once we did the project) she told us the truth and I am grateful that we listed with him and I would suggest that anyone selling a home interview him.