II. Buying: Things to Avoid and Common Mistakes
First what you need to do is to define your budget and make a list of your home purchase’s goals. You don’t want to spend more money than necessary when purchasing a home. You need to consider in terms of maintenance of your house and mortgage payment, whether is affordable to you. Sort out the benefits and features you need versus those that are desired.
Getting a free consultation from us will help you cut your spending, major spending for unimportant expenditure. Research shows that you will find yourself having a better sleep at night if you avoid home buying mistakes at early stage.
Avoid Changing Your Job. Lenders like to see a consistent job history, so if you change you job he may take you to a negative thought and feel uneasy to lend you the home. Not only that, change a job will affect many factors that are extremely related to your home buying. If you are a salaried employee who does not earn additional income from commissions, bonuses, or over-time, switching employers should not create a problem. Just make sure to remain in the same line of work. Hopefully, you will be earning a higher salary, which will help you better qualify for a mortgage. The mortgage company will get job and salary verification from your employer and reevaluate your application.
Avoid Making Large Purchases. Once you have completed on a loan application, do not buy things such as automobiles (cars, motorbikes etc), washers, dryers or refrigerators, lawnmowers, garden equipment, expensive electronic or computers, jewelry, vacations, expensive wedding and at but not least, furniture for your new home.
Why?
When you are applying for your loan, as a part of interview procedure, your loan officer will ask you your price range, income, savings and debts. Having any car or other high reoccurring payments will increase your debt to income ratio and adversely contribute to your home loan qualification. So, hang on--if you are depending on a mortgage to move in, you'd best wait until after closing to buy that car though a new car would look fantastic in the driveway of your new home.
You can qualify for a home almost $50,000 more than if you don’t have a car or other large reoccuring paymenst to make. This could make a huge difference between getting the house you like and getting the house you love!
Avoid Pulling Your Credit. When you apply for new lines of credit, the lenders will do a hard inquiry on your credit history. Hard inquiries will cost you a few points on your credit score. So, it might be appealing to take advantage of hot new credit card promotions but it will hurt you in the long run.
That alone will make your FICO scores reduce and effect your overall approval.
Common Mistakes
1) – Not Being Pre-Qualified For Financing Before Looking
When you start to look, it is important that you know how much you can comfortably spend on a home. Getting pre-qualified for financing will lock down your price range and help prevent you from being turned down after falling in love with a home. It will also save you the strain of having to find a lender within a few days of conditionally buying a home. In times of fluctuating interest rates it would benefit you to lock in a lower rate. This could save you thousands of dollars if the rate increases while you are in the process of buying.
2) – Failing To Seek Out The Services Of An Experienced Real Estate Agent
Many Buyers are unaware of the fact that in almost every case they are not responsible for paying the agent’s fees; the agent is being paid a commission from the seller. It is always best to seek out an experienced real estate agent that can use their information regarding recently listed and sold properties to get you the lowest price possible.
3) – Failing To Know Research The Market Before Making Your Offer
Have your agent prepare all the area sales and comparables in your area and get a copy to look over before you make your offer. This will help ensure that you do not overpay what the home is really worth. In most cases, this is the same type of information that the seller saw when setting the price of their home.
4) – Not Being Informed Of Your Rights & Obligations During Your Offer To Purchase
It is of the utmost importance to be aware of your rights and what to expect from a competent real estate agent. A small mistake in a condition or clause could end up costing you time and money, or in some cases even void your contract.
5) – Not Understanding The Common Negotiating Methods Used At Offer Time
Some buyers have been told that the best way to get a good price is to low-ball the seller from the start in hopes that the seller will drop their price down fast in their counter offer. In reality this often does nothing more than upset the seller and will probably end up ruining the chance at an acceptable offer to both of the parties involved. Have good communication with your agent, and they will be able to inform you on the many proper ways to negotiate a deal and still get you the lowest price.
6) – Failing To Use Home Inspection Company
Buying your home often times the most important investment and financial transaction that you will ever make. A home inspection can save you hundreds or even thousands of dollars and unexpected problems down the road. In addition to the inspection, it is often a good idea to request some type of Home Warranty to cover the electrical appliances that come with the home.
7) – Letting Your Emotions Cloud Your Judgment
Buying a home is an important and exhilarating process! It is important not to let your emotions get the best of you and cloud your judgment of whether you can really afford to make the payments comfortably, and so on. Be sure not to get so excited that you get in over your head.
NEXT: III. Buying: Maryland Real Estate Market
IV. Buying: Real Estate Pricing
V. Buying: Making An Offer & The Settlement Process
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