Thanks to historically low mortgage interest rates and greater buying power, the real estate market is super hot in the United States. In fact, over 5.8 million homes were sold in May of 2021 alone. With a market like this, it’s important to have a solid home shopping strategy.
Lots of articles tell you what you should do when searching for your home, but what errors with home shopping should you avoid? As it turns out, there are quite a few errors you can make in the home buying process. Read on to learn what they are and how to avoid them!
1. Shopping without Prequalifying for a Loan
When you start the home buying process, you always want to make sure that you have financing in place to avoid any hiccups later on down the line. The best thing you can do is to prequalify for a mortgage before ever stepping foot in a house that’s for sale.
Prequalifying for a loan will help you in two different ways. First, it’ll help you narrow down your search based on the amount for which you have been approved. Once you’ve prequalified, you’ll know what your monthly payment will be, which will also help you determine how much home you can afford.
The second way prequalification can help you in the home buying process is that it tells the sellers that you’re serious about your offer. It also makes the seller feel more secure that you won’t fall out of escrow because you can’t get financing. In a busy real estate market, any assurance you can make to the seller is worth its weight in gold.
2. Not Starting Early
You can plan all you want about the types of homes you’re interested in buying, but unless you get out there and start looking at houses, you won’t truly know what you want. That’s why it’s super important that you start looking at houses before it’s time for you to start putting in offers.
This is especially important for people who have a tight timeline for purchasing a home and moving. Testing the waters and figuring out what you want and where you want to live will make the process a lot easier.
3. Working with the Listing Agent
Think of real estate agents like attorneys. The listing agent represents the seller and has their best interests at heart. The buyer’s agent is there to help support their home search get them the best deal possible.
If you’re working with the listing agent only, then the only interests that are represented are that of the seller. This means you’ll likely end up paying more for the home and the deal will be skewed in favor of the seller. It’s always better for the buyer to have their own real estate agent to help make the deal as fair as possible.
Having a hard time connecting to a new agent? Try the “contact us” section of a realtor’s website to get their attention.
4. Skipping the Home Inspection
In a hot real estate market, it’s tempting to make concessions on your offer so the seller will accept it. One of the worst concessions you can make, however, is to skip the home inspection contingency.
Even the savviest of homebuyers can miss some major issues with the house when they’re touring. You won’t always see things like water damage or foundation issues. Even the roof will look pretty good until you get up close and personal with it.
Skipping this critical step can leave you with a lot of expensive surprises once the deal goes through. Unless you have cash for a fixer-upper, it’s best to make concessions elsewhere.
5. Buying Outside of Your Budget
When it comes to buying a home, your budget should rule your decisions. When you find your dream home that’s outside of your budget, it might be tempting to go over. It’s always important to keep in mind that, unless you have a ton of extra cash floating around, you need to stick to the budget.
Homes are always full of hidden surprises. You might have a freeze that causes a pipe to burst or the taxes on your home might go up significantly. If you’re already over budget, then you won’t be able to afford to tackle things like this, and you might even lose the home altogether.
6. Letting Emotions Rule Your Decisions
There’s nothing the seller and the seller’s real estate agent want more than a buyer who is emotionally invested in a particular house. Leading with your heart when shopping for a home means that you might not make the most financially savvy decisions.
If you feel like you’re getting too emotionally attached to your home, speak with someone outside of the process to determine if you’re making the right decisions. They’re more likely to think of your offer and contract in a rational manner, and they can tell you if you’re headed in the right direction.
7. Lowballing the Seller
If you’ve spent any amount of time watching home buying shows on TV, then you’ve probably caught wind of people making offers that are significantly below what the seller is asking. Don’t let those shows fool you! Lowballing a seller is unlikely to result in a contract.
When you make an offer on a home, the seller can accept, counteroffer, or just not respond. If you lowball your offer, you might end up insulting the seller, and they’ll be less likely to entertain any further offers from you. If you really want the home on which you’re placing an offer, work with your agent to come up with a solid offer that’ll grab the seller’s attention.
Avoid These Errors with Home Shopping and You’re Golden!
No matter whether the housing market is hot or cold, there are always some errors with home shopping you should avoid. Take your time doing your research on what you want in a home and deciding how much you can realistically spend. The more work you put in, the easier the process will be on you and your real estate agent!
Navigating all things related to real estate and home life isn’t easy. Sometimes you need someone on your side who can help you make smart and informed decisions in life. Check out the rest of our blog for tons of articles that’ll help you do all of that and more!
