People looking to get into the home-buying business can make some big stumbles right out of the gate. They are definitely avoidable, but are often overlooked. Whether you are working with a first-time buyer or investor, or becoming one yourself, here are some pitfalls to dodge.
- They don’t ask the lender adequate questions: In order to get the most out of the lender, borrowers have to be willing to ask questions. They may miss out on a spectacular deal by taking the backseat. They should do some research and prepare some questions to ask in order to have a better understanding of what the lender is offering. Important questions include: What are the closing costs? Is there a prepayment penalty on this loan? When can they lock the interest rate and what will it cost to do so?
- They take time when deciding to place an offer: Time is an important factor. If a borrower waits too long to submit a bid on a house, it could be quickly snatched up by another savvy buyer. The better the deal on a house, the faster it will be bought. That’s why it’s important to be able to make a decision and place an offer quickly.
- They use an agent who isn’t looking out for the customer: A good agent will be willing to help their client through all stages of the homebuying process. This includes providing helpful information and feedback when necessary. Bad agents are only looking out for their bottom line and a large commission.
- They make an unappealing offer: There are a lot of things a buyer can do to make an offer more appealing to a seller. An agent can help in this area. If they have sold houses in the area recently, they may know the trends of successful bids. Having the aid of a skilled negotiator on your side helps borrowers secure a bid.
- They don’t consider resale value before buying: It’s easy for a first-timer to overlook the resale value of a home when they are itching to own. A first-time homeowner will only stay in a house for four years on average. It’s important to take the time to establish a home’s worth and whether or not it will be worth the same later on when you might be interested in selling.