You’ve gotten pre-approved for a mortgage and are working with a real estate agent; you are officially a home buyer! This is a fun and exciting time in your life, and it can become very stressful if you let it. Buyers sabotage their dream of becoming a homeowner all the time, so here’s a list of what NOT to do if you want to live happily ever after.
Mistake # 1: STAY pre-approved
So many buyers get pre-approved for their mortgage and assume that it’s good forever. Not all lenders and real estate agents will take the time to explain the complexities that involve getting pre-approved, and therefore do not educate their client about how to STAY pre-approved. Your job, income, debt-to-income ratio, and credit score are all verified in order to determine if you can get a mortgage, and for how much you can borrow. This will be verified numerous times throughout the process, and up to the day you close on a home, so it cannot change! This means:
- NO new lines of credit can be opened.
- NO more credit card usage.
- NO late payments.
And please, for the love of all that’s holy in the world, do NOT go buy a new car or new furniture & appliances for the house you haven’t even bought yet. Wait until you close, and then you can put yourself into as much debt as you want. After all, it is the American way, right?
Mistake # 2: Dilly-Dallying & Delaying
You look online every day at homes, and your agent emails you with new listings that match your exact search criteria. When a home first hits the market, it’s like a shark tank and tons of agents and their buyers are circling it like it’s dinner. If you want to see a house, then you need to jump on it. I know you’re busy with work, or your kid’s baseball practice, or you need to go grocery shopping, or you don’t have a babysitter. The amount of obstacles are endless, but if you really want something, then you make the time to do it! Use an hour or two of vacation time and leave work early, or delay the errands, and bring the kids if you can’t get a sitter. This could be THE ONE, and you can’t see it on Monday and expect it to still be for sale by the weekend, when you have more time.
Mistake # 3: Writing a low offer.
In most areas, it’s a sellers’ market. That means that the seller has the upper hand because inventory is low and they have little competition. This means that YOU, the buyer, have a ton of competition and potentially dozens of other buyers wanting the same house.
This is not the time to write a lowball offer, “just to see” if you get it. Your real estate agent will run comps to make sure the home is priced appropriately, and they will negotiate for you on everything from the price, to repairs needed, to the date of closing. You need to trust your agent, and if you really WANT THIS HOUSE, then don’t mess around and lose it to someone else who wanted it more. Homes are worth what a buyer is willing to pay, so that sometimes could be less than asking price, or more than asking price.
Mistake # 4: Asking for too much from the seller.
Even if you write a full-price offer and on paper you look like the perfect buyer, you have to assume there is someone else even more perfect competing for the same house. You may need some help with closing costs, or you may not want to close for 60 days because you have to sell your current home first, or you may want the appliances or items that aren’t included in the sale.
Be careful about how much you ask for, because a seller will weigh all the pros and cons, especially in a multiple offer situation, and not necessarily accept the one that was for the most money. Another buyer may offer $5,000 less, but be able to close in 30 days, not need help with closing costs, and not want anything extra.
In the end, it still nets the sellers more money, and less time waiting. Your real estate agent will help guide you on making the best offer, so trust their experience and advice! If you need help with closing costs, it may be wise to not shop at your maximum approved amount, and you may want to start eating Ramen Noodles and PB & J’s for a while to save money so you don’t have to ask for so much.
Mistake # 5: Nit-picking the home inspection report
Every home has issues. Not one home on this planet will produce a perfect score on an inspector’s report. A home inspector will give you a thick report that makes it look like this house is about to blow up with all the code violations and recommended repairs. This does not give you the right to go back to the seller and demand it all be fixed, or try to get them to lower the price.
Depending on the severity of the needed repairs, sellers and buyers can work together to get those fixed or replaced if both agree, but a drippy faucet or few missing GFCI plugs doesn’t constitute you wanting $5,000 off the price of the home. The inspections are done for your protection, and so you know what you are getting into.
All homes are sold AS-IS, and it’s your job as the new homeowner to maintain the home and make any repairs needed once you own it.
Mistake # 6: Having Premature Buyer’s Remorse
Once your offer has been accepted, the appraisal is done, the inspection is done, and everything is hunky-dory – STOP home-shopping!
You are weeks away from closing and becoming a homeowner, and you see more new listings pop up that you think are better than the one you’re about to buy. You’ve invested money into this sale already, and you have a legally binding contract, so stop daydreaming about the “what-ifs” that other homes may offer, and focus on the home that is about to be yours. There’s no better deal out there if you got the house you wanted, and it’s passed all the contingencies.
You’re on the home stretch now, so stay patient and if you must shop online, then look for all the new furniture, paint colors, and updates you plan to do. Hoard the ideas on Pinterest or put things on layaway, and DON’T buy anything until you close. This has been a wild ride, and you really don’t want to start all over again!