Here are some of the most common mistakes that buyers or sellers make when it comes to purchasing or selling real estate. Read these carefully, as you don’t want the same thing to happen to you! You can avoid real estate remorse.
Purchasing Without Even Viewing It
It’s really easy to buy a house without seeing it because of the Internet and virtual tours, but virtual tours can be deceiving. Plus, it’s really hard to actually get a sense and feel of a home by only looking at it online. You need to actually walk through the place yourself. If that’s just not possible, hire an inspector to go look at the property and provide you with an assessment.
Trusting Everything The Ad Says
Don’t assume every ad is fact. Learn to decipher real estate lingo. For example, “cozy” means small, and “as is” means it’s a fixer-upper. If there are a lot of exclamation points in an ad, it’s because there is so little to say about the place. Follow the old adage: If it sounds too good to be true, it probably is.
Purchasing the Most Expensive House in The Neighborhood
The most expensive house will only depreciate in value over time, rather than appreciate, which is what you want. Also, those houses are often not the first house to sell because they are usually overbuilt to the neighborhood. It’s absolutely critical that you research the neighborhood before you buy to find out what the price point should be.
Not Being Practical Regarding Your Budget
Just because the bank prequalifies you for a loan amount of $500,000 doesn’t mean you can afford to make that payment every month. Before hitting the streets for a house hunt, you should sit down and make a monthly budget of what you spend every month. Come up with a number that you are comfortable spending on your mortgage payment, aside from those other expenditures. An easy way to do this is to take a third of your gross income and have that figure be the number you spend on the house. It is also a good idea to have six to nine months of mortgage payments in the bank, plus a little extra if you have any repairs that you might need to do.
Only Visiting The Home Once
It’s important to visit a house more than once because the neighborhood itself may be very different, depending on the day of the week and the time of day. It’s also a good idea to go home and think about it, even sleep on it, before you go back again.
Not Getting a Pre-Approval From The Bank
When you are pre-approved, the bank is saying, “we will give you a mortgage of up to this amount, so now all you have to do is find your home.” Some sellers only allow real estate agents to show their house if someone has a pre-approved letter. That indicates that the shopper really is serious about buying a home.
Getting Attached to The First Home You View
Many homebuyers, particularly first-time homebuyers, fall into the trap of falling in love with the very first house that they see. You need to at least look at three more houses in the area to get an idea of what the comparables are in that price range. You want your real estate agent to show you homes comparable to what you saw. At the end of the day, re-evaluate. Be sure to hire a home inspector to thoroughly check out a house you are interested in purchasing.