3 Most Common Mistakes Buyers Make
1. They Get "Pre-Qualified" instead of "Pre-Approved"
Getting pre-qualified means that you spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lender pronounces you "pre-qualified" and issues a certificate that you can show to a seller.
Sellers are aware that such certificates are WORTHLESS, and here's why! None of the information has been verified! Many times unknown problems can come to the surface! Some of the problems I've seen include recorded judgments, alimony payments due, glitches on the credit report due to any number of reasons both accurately and inaccurately, down payments that have not been in the clients' bank account long enough, etc.
So the way to make the strongest offer today is to get "pre-approved". You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few days to a few weeks depending on your situation. It's VERY POWERFUL and a weapon I recommend all my clients have in their negotiating arsenal.
If you don't have a lender to call that you trust, use one of the lenders that I have trusted to work for me personally on my home and refinances. There's no charge and no obligation to any lender when you request to get pre-qualified. Why wait? Contact me for a recommendation on who to call.
2. If They Own a Home, They List it Too Late!
If you have a house to sell, sell it before selecting a house to buy! Contingency sales aren't nearly as strong as one that comes in with a ready, willing and able buyer.
Consider this scenario: You've found the perfect house - now you have to go make an offer to the seller. You want the seller to reduce the price and wait until you sell your house. The seller figures that this is a risky deal, since he might pass up a buyer who DOESN'T have to sell a house while he's waiting for you. So he says OK, he'll do the contingency but it has to be a full price offer! You have now paid more for the house than you could have because of the contingency, and you have to sell your existing house in a hurry! Otherwise you lose the house! So to sell quickly you might take an offer that's lower than if you had more time. The bottom line is that buying before selling might cost you THOUSANDS of dollars.
If you're concerned that there is not a house on the market for you, then go on a window-shopping trip. Tell your agent that you need to see what's on the market in the price bracket you can afford, before you list your home and get serious about buying. In your window shopping, narrow down the price you will need to pay and the areas you want to buy in. If you feel confident after that then put your house on the market.
Another tactic is to make the sale "subject to seller finding suitable housing". Adding this phrase to the listing means that WHEN YOU DO FIND A BUYER, you don't have to move out of your home until you find a home that you want. If you don't find anything to your liking, you don't have to sell your present home. This is a very safe way to go.
(Step one, if you own a home, is to first find out what you can sell it for. Step two, check with your lender to get pre-qualified. Step three, contact an agent to help you start window-shopping until you feel like you know the market and you believe you can find something that fits your pocket book. Step four, list your home and start shopping seriously! If you are going to use the same agent to help you sell and help you buy, be sure to negotiate a discount on the commission you pay as the seller. Note: You never pay an agent to help you buy.)
3. They Waste Time Looking at Homes That Are Already Sold.
I can't tell you how many people find real estate they like on the internet or in an ad and call me on it, only to find out that it's not even on the market or it's already sold. Be a wise shopper and understand that ads are sometimes created by agents to make the phone ring and many of the Internet ads are completely outdated!
Even if they are not outdated, many of the homes have some drawback that's not mentioned in the ad, such as traffic noise, power lines, or litigation in the community. What's not mentioned in the ad is usually more important than what is. For this reason, be very careful when reading ads.
Remember that the person writing the ad is representing the seller and not you! They want you to call them directly so they can bypass getting an agent to represent your interests on the deal. The most important thing you can do is to have someone on your side looking out for your best interests! And because it doesn´t cost you anything, why pass it up?
As your agent, I will critique the property with an eye towards how well it meets your needs and will point out any drawbacks you should know about. So, whether you decide to work with me or not, pick an agent you feel comfortable with, that knows the area you are buying in, and then enlist the services of that agent as a buyer's broker. Then you become a client with all the rights, benefits, and privileges created by this agency relationship, and you're no longer just a shopper.
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