Open Houses
Home buyers: 5 costly mistakes to avoid
1. FAILURE TO GET PRE-APPROVED IN WRITING FOR A HOME MORTGAGE.
Most home buyers need to obtain a home loan to purchase their house or condo. Smart buyers shop for a mortgage before searching for a home.
2. FORGET TO WORK WITH YOUR OWN BUYER'S AGENT.
The second major mistake some home buyers make is they forget they need their own buyer's agent. It's very easy for prospective buyers visiting weekend open houses to let the listing agent they meet prepare the purchase offer. It costs home buyers nothing extra to have their own buyer's agent. If the home is listed for sale, the listing agent will split the sales commission with the buyer's agent. In the rare situation of a "for sale by owner" home, most FSBO sellers are only too happy to pay the buyer's agent half of a customary sales commission, usually 3 percent.
3. BUY A HOME WITH AN INCURABLE DEFECT.
In the current buyer's market in most communities, where there are more home sellers than qualified buyers, house and condo buyers can afford to take their time and be "picky." Serious incurable defects are called "economic obsolescence" by appraisers. Examples include a bad floor plan, poor location (such as adjacent to high-voltage power lines or the city dump), noisy street traffic, or lack of onsite parking.
4. FAIL TO INSIST ON A COMPARATIVE MARKET ANALYSIS (CMA) BEFORE MAKING A PURCHASE OFFER.
Amazingly, many home buyers still follow the old rule: "Offer 5 percent below the asking price." That makes no sense. Instead, smart home buyers ask their buyer's agent to prepare a written comparative market analysis (CMA) before making a purchase offer. This CMA is the same for
5. NEGLECT TO INCLUDE TWO KEY CONTINGENCY CLAUSES.
Way back in the hot home seller's markets of 2005 and 2004, it was common for home buyers to make "all cash, no contingency" purchase offers. The current buyer's market in most cities has changed that foolishness. Today's smart home buyers include at least two purchase-offer contingencies: (a) a satisfactory lender's professional appraisal of the home for at least the purchase price, and (b) the buyer's approval of a professional inspection report to be obtained at the buyer's expense.
There are no open houses at this time.
