4 Common Home Buyer Slip-Ups
I found this article this morning, and thought the advice to prospective home buyers was “spot on”. We do see buyers shoot themselves in the foot often times. Item number 2 is particularly exasperating. I hope this information benefits some prospective buyers out there.
Real estate professionals see a lot of dumb reasons why home buyers ultimately end up losing out on a deal. Practitioners recently shared some of the more common mistakes with realtor.com®, including ways to correct the situation:
1. Shopping outside their price range.
“It sounds obvious, but some home buyers just have trouble sticking to a budget”, says Benny Kang, a real estate professional in Irvine, Calif. Shopping online may increase the temptation to bump up the price range. One way to avoid this situation is to encourage your buyers to get preapproved for a loan so they know what they can truly afford and stay within their limits.
2. Submitting lowball offers in a hot market.
“If you’re in a seller’s market, making a crazy lowball offer can piss off the seller”, says Kang. Buyers would be smart to offer full price when homes are priced well. Help buyers understand how a comparative market analysis can offer insight into pricing.
3. Making a big purchase while in escrow.
Buyers often don’t realize they will need to delay big purchases and opening new credit lines while in the process of buying a home. “Even buying a fridge can throw off your credit or debt-to-income ratio”, says Kathy Conway, a Philadelphia real estate professional. If a big purchase is made, the mortgage lender’s underwriter will need to re-evaluate the buyer’s finances and recheck her credit report before closing to ensure the buyer still qualifies for the mortgage, so be sure to warn buyers when they’re approaching this period.
4. Forgetting to budget closing costs.
Buyers don’t just need money for the down payment. There are a lot of extra fees at settlement, too. Buyers can receive an estimate from their mortgage lender of what the closing costs will be before even making an offer on a property. Make sure they review that information carefully. Closing costs can vary drastically but typically cost 2 to 7 percent of the home’s purchase price.
Source: “8 Dumb Reasons People Can’t Buy a Home”, realtor.com® (July 11, 2017), and Daily Real Estate News, (Wed July 12, 2017)