How to avoid common Buyer Traps
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Buying a home is a major investment. How would you like to:
- pay too much for the home you want?
- lose your dream home to another buyer?
- buy the wrong home for your needs?
A planned approach to home buying can help you steer clear of these common traps. Here are common and costly home buyer traps and how to avoid them.
Overpaying for a property
Your agent should provide you with a CMA before placing an offer. You are bidding blind without this information. This is something that Miguel Avila would do for you.
Buying the Wrong Home
Many buyers get emotional, just to find themselves the owner of a home that does not fit their needs. Write down what you need. This way you compare and ensure the home meets your needs.
Title Issues
Make sure that you will own your new home free and clear by having a title search done. You do not want to find that there are encumbrances on the property such as tax liens, easements, leases or others.
Inaccurate Survey
With the purchase offer, include a request to an updated property survey which marks the boundaries. If the survey provided is not current, you order a new one to make sure that structural changes are correct.
Fix-up Surprises
Hire an independent inspector to objectively view the home inside and out, and make the contract contingent upon the inspector report that details items that need to be fixed with approximate repair cost.
Forgetting Mortgage Pre-approval
Pre-approval is free & done in 20 minutes. With a pre-approved mortgage, you can shop for your home knowing that the money will be there when you find the home of your dreams.
Missed Contract Issues
To avoid missed repairs that could delay a closing, agree to escrow the repair amount to cover non repaired items. Prepare a list of agreed issues, walk through them, and check them off one by one.
Closing in a rush!
Insist on seeing all paperwork the day before you sign. Make sure the documentation reflects your transaction, and that nothing has been added or subtracted. Make sure the interest rate is right and that everything covered. Do not rush this process on the closing day, or you may run into a last minute issues that you can not fix without compromising the deal terms, the financing, or even the sale itself.
First Time Home Buyer?
You may be a renter thinking about purchasing a home. Home ownership is a serious commitment, and there are many factors to consider:
How long you plan to live in the home
Selling a home costs money. If you potentially may have to move in the short term, the value of your home may not have appreciated enough to cover the costs of buying and selling.
Although average appreciation in Northern Virginia has been around 20% per year over the last 5 years, economists are expecting a lesser level of appreciation. Hence, take this into consideration in the event, you should need to sell. The real estate market may have downswings.
How long the home will meet your needs
What features do you require in a home to satisfy your lifestyle now? Five years from now? People tend to remain in homes longer than they initially intend, primarily due to the work and expense associated with moving. Therefore it is worth considering a home with room to grow.
Your financial health - your credit and home affordability
Is now the right time to buy a home? Would you rate your financial picture as healthy? Is your credit in good standing? Do you have a high credit rating? Visit http://www.myfico.com/CreditEducation/ to learn from the people that create your credit score how to improve it.
To determine how much home you can afford, talk with your lender or Miguel Avila can find you a lender. The 28/36 lending rule means that your monthly housing costs can not exceed 28% of your income and your total debt load can not exceed 36% of your total monthly income. Depending on your assets, credit history, job potential, and other factors, lenders can push the ratios up to 40-60% or higher. While we're not advocating you purchase a home utilizing the higher ratios, it's important for you to know your options.
Where the money for the transaction will come from
Typically, homebuyers will need some money for a down payment and closing costs. However, with today's broad range of loan options, having a lot of money saved for a down payment is not always necessary, if you can prove that you are a good financial risk for a lender. "No money down" mortgages are becoming more common, but these have additional costs associated with them.
The ongoing costs of home ownership
Maintenance, improvements, taxes, and insurance are all costs that are added to a monthly house payment. If you buy a condominium or townhouse, a monthly homeowner's association or maintenance fee will be required.
If you are still unsure if you should buy a home after making these considerations, you may want to consult with your accountant or financial planner to help you assess how a purchase fits into your goals.
Click Here For A List Of Schools In Santa Barbara
Click Here For A List Of Useful Vocabulary That You Will Need To Understand
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