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September 11, 2010

Avoid These 5 Home Buyer Mistakes

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Category: Home Buyers, Real Estate Info, Video


Are you thinking that it may be time to buy a home in Tehachapi or in Kern County?  You may be right.  We have historically low interest rates and affordable home prices that make home ownership more attractive than ever for Tehachapi residents.  Interestingly, these great opportunities may make some potential first time buyers over confident.  Whether it’s your first home or your retirement home you want to avoid making mistakes.

Mistake #1: Don’t use a REALTOR®.     Some buyers think that a great way to save money is by foregoing the assistance of a REALTOR®.  The Tehachapi Association of REALTORs® has a couple of good articles to check out on Why Use a REALTOR® and why Having a Buyers’ Agent Helps.

There is a mountain of paperwork and a slew of negotiations associated with purchasing a home.  This is not the time to try to save money on your own.  An excellent REALTOR® can assist you with the entire process and save you money as compared to taking the DIY approach.  Since you probably already have a full-time job, do you really want to take on the task of coordinating offers, counter offers, financing, inspections, investigations, repairs, and a myriad other items associated with your purchase?  Can you imaging how much money you could lose if you get the timing wrong?  Did you know that each contract will include deadlines by which each inspection, investigation, various stages of financing, etc. must be completed?

Mistake #2: Rely on Online Mortgage Calculators for Financing Pre-Approval. Online mortgage calculators can be a great way to get a ball-park idea of what you will be paying, but they are no substitute for a qualified local lender.  An excellent local lender will provide a no-cost no-obligation financing pre-approval for you.  In many cases, an excellent local lender can offer a much better financing option for you than may be available from an online or out of area vendor.

Mistake #3: Lowball offers. Even though there is lots of inventory for you to choose from don’t assume that means any offer will be accepted.  Conversely, don’t pay more than is necessary for the house of your dreams.  Where’s the happy medium?  Structure your offer to purchase based on recent sales of comparable houses, foreclosure activity in the neighborhood and overall market activity.

Mistake #4: A newer house is better. Not always true.  With the building boom in the 2005 plus period, lots of houses were built quickly.  It’s not uncommon that the construction was perhaps less carefully supervised than it might have been.

Which would you rather have: a 2006 tract house with flaking stucco and 2 x 4 construction or a 1994 custom built 2 x 6 framed house?  The answer may be more difficult to determine than you think.  Yet another reason that having a team of professionals (REALTOR®, lender, home inspector, etc.) is so important.  Your team can help you evaluate and sort out your best choices.

Mistake #5: Buying a money pit. You negotiated a contract with the seller that seems fair.  During the buyer investigation phase you discover that the septic system needs replaced and a number of unexpected issues turned up on the home inspection.

The whole point of doing an investigation of property condition is to make sure that you are satisfied with what you are buying.  Sometimes the investigations will reveal more issues than you are willing to deal with.  It’s okay to walk away from the deal and look for a different home with fewer issues.

Because you were still within the specified time-frame for buyer investigations, you can cancel the contract, retrieve your deposit and move on with your life.  That could be a better choice.

Buying a home can be a confusing and potentially overwhelming undertaking.  Take your time, get educated, and put together a top notch team to help you.

Share your experiences below.  Go ahead, you know you want to.

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