Most people find that buying a home is the biggest investment they will make in their lifetime and are aware of the complexity involved. It is important that you prepare yourself the best that you can.
Buyers if you would like to be put on our email list to receive new listings:
BUYER’S MOST COMMONLY MADE MISTAKES
- Looking for a home without being “Pre-approved”. Not being pre-approved is not being prepared.
Look at the circumstance from the seller’s point of view. You, a complete stranger (a buyer), are
asking the seller to take his/her property off the market for two
to three weeks while you apply for a loan, with no guarantee that
you will be able to obtain a loan.
Sellers want to sell their property they look for QUALIFIED
buyers. There are two basic types of qualification:
b) Pre-approved: This is when one of the above mentioned lending concerns has verified the information provided, the loan process has begun and a letter is provided by the lender (a pre-approval certificate) stating that the buyer has qualified and been approved for the loan amount indicated. This is a definite guarantee that the buyer has qualified for the amount indicated and can quickly move forward with the purchase of a home.
2. Selecting a lender based solely on “the lowest rate”. Don’t misunderstand, the RATE is important but you must consider the total cost of your loan including the APR (annual percentage rate), loan fees, discount and origination points. Make sure that your lender shows the discount points (money charged up front by the lender in order to reduce the interest rate) separate from the origination points (monies charged up front for services rendered in originating the loan). The most important thing you can do is interview prospective mortgage companies; learn all you can about your true and total costs, before you commit. If in the final hours of obtaining your loan your lender suddenly increases their profit margin ‘at your expense’ you won’t have time to start again with a different lender. Shop ahead of time and be prepared.
3. Never make a “verbal agreement” they just don't count. In Arizona real estate all things must be in writing. If you are asked to sign a document contrary to your verbal understanding “DON’T”. For example, a seller agrees to include appliances in the sale of the property but the written contract excludes them, don’t sign until they are added. The written contract will always override any verbal agreement.
4. Not receiving a “Good Faith Estimate”. Within three business days after a broker or lender receives your loan application, you must receive a written statement of fees pertaining to the transaction. This is the law! Bring that Good Faith Estimate (GFE) with you when you sign your loan documents. You should not pay fees, which are substantially different from those shown in the good faith estimate.
5. Not getting a “Rate Lock”. When you get a confirmation from a lending institution telling you that they have locked your rate, get a statement in writing detailing the interest rate, length of the rate lock (dates) and program details.
6. Using a “Dual Agent”. Buyers’ interest are usually very different from those of a seller, sellers want the highest price possible, buyers want the lowest price they can get. When an agent represents both the seller and buyer, in most cases his or her negotiations are more favorable for the seller. As a buyer you are better off having an agent represent you exclusively.
7. Buying a home “Without Professional Inspections”. Unless you are buying a house that has a home warranty on the major equipment and structure, furnaces, roof, electrical, etc., it is highly recommended that you get an inspection by a certified, qualified inspector. Know what you are buying, you could be faced with high-unexpected costs for repairs that could have been avoided with a simple inspection (many lending institutions require a home inspection before you can close on a purchase). Inspection reports can be great tools in the negotiation process. If there are repairs to be made and the seller agrees to make them, have your inspector verify that they are done prior to close of escrow. Don’t assume that a seller has made the repairs….verify!
8. Not shopping for “Home Insurance” before you try to close. Many buyers wait until the last minute to do this and wind up paying higher premiums than they should have. Shop ahead of time, be prepared and save.
9. Signing documents “Without Reading Them”. Always review the documents you are signing….if possible get them in advance so you can truly understand what you are signing. Many of the documents you will have to sign are “standard” forms and are available for review. It is not likely that you will have the opportunity to review them all, but request what you can and take what you get. Read before you sign, everything! Take your time, don’t be rushed, it is your money.
And last but not least, the 10th mistake most commonly made by buyers....
10. Not allowing for “delays”. Expect them!!! In a perfect world all things would happen “on time”. Real estate is not a perfect world. Give yourself some leeway; don’t expect things to happen on time (if they do, feel privileged). Real estate transactions can be nerve racking, expect problems (there are always some) and will be all the more rewarding when you finally do move into your new home.