In my line of work I have the opportunity to observe many real estate transactions and have found what I think are the top 5 purchasing mistakes made by both novice and experienced home buyers. We will examine each in detail:
- Overpaying for the property. Why do that?
To obtain a fair purchase price there are a few common sense rules to adhere too. I have picked four commonly overlooked:
Listing realtors love to solicit multiple offers in order to create a bidding war and drive up the selling price, so don’t participate in this “game”. Be first in with your offer and allow no more that 24 hours for your offer to be accepted. Don’t give the sellers the time to receive and review alternate offers. Be prepared to make your “first offer” your “final offer”.
Check the comparables. Homes similar to the one you are purchasing have been recently sold in the surrounding neibourhood. Ask your realtor to provide a comprehensive list of comparable homes sold so you can determine a fair price. Sellers tend to overstate the value of their homes. Their asking price may not be reflective of the market.
Purchasing a home below market value because it is a “fixer upper” may not be good value. A home in need of repair shows no pride in ownership on the part of the sellers. If repairs are needed on the things you can see, imagine the condition of the items you cannot see. A home inspector can only see what you can see. Sorry, they possess no x-ray vision to see behind the walls. If you are intent on purchasing a “fixer upper” you are going to find more problems than you initially anticipated, so budget accordingly.
Optimize your resale potential. You may love a unique property feature like a garage converted into another bedroom, but when it is time to sell you may find the majority of purchasers would prefer the garage to park their car. At some point you will be selling so don’t pay a premium for “unique”, as chances are you will be renovating back to the “norm” at the time you sell or you may have difficulty finding a buyer as enthusiastic as you were.
Did you have another common sense rule based on your experience? If so go to my blog at www.casbmanagementgroup.com/blog and leave a comment.
Part2- Keeping up with the Jones’s. Buying the home you can’t afford.