by Susan Lavery
Get a leg up on your competition and learn to avoid the following common home buyer mistakes:
YOU CHASE A DEAL AT ALL COST
Some would-be buyers consistently make lowball offers in hopes of getting a “deal,” causing them to lose out on the home they really wanted. This could end up not only costing them their “dream” home, but could end up costing money in the long run as home prices continue to rise.
In a strong real estate market, the deals are in homes that have been overpriced and haven’t sold as a result, and properties that don’t show well because they need work. If the home you want is well-priced, in a good neighborhood and doesn’t need much work, the best strategy is to make a solid offer and be prepared to go over asking if necessary. Remember, you will probably want to redecorate a little anyway, so someone else’s “hideous” paint color may save you thousands of purchase dollars!
YOU’RE A DO-IT-YOURSELF AGENT
With so much information about homes available online today, many people may assume they can buy a home without a real estate agent’s help. This strategy often backfires.
First of all, the real estate agent’s role isn’t just about finding listings. With Internet access, buyers can easily find listings themselves. Keep in mind, however, that listings commonly found on “consumer” sites are often one to two weeks or more behind the Multiple Listing Services available only to agents. Well-priced homes in popular neighborhoods can be under contract before YOU even see them!
A good agent can present your offer to the seller’s agent in a way that will help get it accepted. A savvy agent knows the local market. For example, an agent might know that a comparable home sold for 5 percent less than the home you’re considering only because the sellers were divorcing or the property had repair issues. Without an agent, you’d simply see that the comparable home sold for 5 percent less. You might ask the seller of the home to match that 5 percent reduction — and you’d be surprised when the seller says, “No thanks.”
Also, experienced agents have a strong network in the local market, which can give you an added edge. Good agents like to work with other good agents. Keep in mind since the listing agent works for the Seller, he or she will not be willing to negotiate on your behalf. The Seller pays the entire commission, so having an agent for your home search costs you nothing.
Most importantly, there’s bound to come a time during the complicated real estate transaction when you have serious doubts or big questions. Your agent can be the trusted adviser you need to walk you through the maze.
YOU DON’T THINK LIKE A SELLER
Most likely, at some point in the future you’ll need to sell the home you’re about to buy. That’s why it’s important to think like a potential seller as well as a buyer. You don’t want to be stuck with a “white elephant” because your size or style of home does not fit most buyers’ wish lists. Research trends and demographics in your chosen neighborhood – or ask your agent about them.
YOU EXPECT TO GET THE PRICE DOWN AFTER MAKING AN OFFER
The real estate market is heating up across the country. In many markets, homes are selling for more than asking price. Some buyers win the bidding war by going over asking — only to try to negotiate the price down by asking for credits during escrow.
This strategy may work sometimes, especially in a weak seller’s market. But we’re in a competitive market for buyers now, so don’t count on it. The seller most likely will have a backup offer from another buyer who really wants the home — and who is hoping your deal falls through.
If you start asking for unwarranted credits, the seller may simply go with the backup offer, leaving you out in the cold.
A better strategy: Make your best offer, and don’t assume you can negotiate it down later.
YOU WAIT UNTIL THE END TO ASK FOR CREDITS
In Houston, a seller had put his house on the market with full disclosure that it had termites. A buyer made an offer and went into contract with the seller.
After further inspections, and at the eleventh hour, the buyer demanded an unreasonable amount be deducted from the sale price. The buyer assumed that the seller, not wanting to put the house on the market again, would agree, just to close the deal. But that’s not what happened. The seller agreed to reduce the price, but not by the full amount the buyer wanted.
The buyer ended up walking away from the deal. The house sold soon after at a higher price than what was negotiated with the first buyer.
Make sure your contract includes a reasonable time frame for inspections, and then HAVE those inspections performed before the inspection period runs out. Then you can negotiate for the Seller to make repairs or giving monetary credit, or you can back out of the contract and KEEP YOUR ESCROW DEPOSIT MONEY.
LAST, BUT NOT LEAST . . .
The market is constantly changing, especially in the Treasure Coast area, with the numbers of foreclosures and short sales and the “new rules” lenders are creating to deal with these properties. Consult a qualified agent or Realtor early in your search and you can save yourself time and headaches later on.