For Buyers and Sellers

The Top Ten Mistakes Buyers Often Make – All of which are Easily Avoided!

If you are like most people, purchasing a home is the biggest investment you'll ever make. If you are considering buying a home, you are probably aware of how complex the home buying process can be. Therefore, it's important to be as prepared as possible. By keeping in mind the following Top Ten buyer mistakes, you will have a more enjoyable buying experience.

Looking for a home without being pre-approved. As a potential buyer competing for a property, you'll have a better chance of getting your offer accepted by being as prepared as possible. A pre-approved buyer is one that has provided a mortgage broker with written evidence of income, expenses, assets, liabilities and credit and all information has been verified by the lender. As a potential buyer, you can see that being pre-approved will give you the best chance of getting your offer accepted – the seller (to whom you are probably a stranger) has a much greater certainty that you will actually be able to close on their home. This is critical in a competitive situation.
Making verbal agreements. Contracts for the sale of land must be in writing. You should be sure that everything that you expect to be a part of the deal is in writing. You should not expect oral agreements to be enforceable.
Choosing a lender just because they have the lowest rate. While the rate is important, consider the total cost of your loan including the APR, loan fees, discount and origination points. When comparing lenders, it is important to request that each lender provide you with a good faith estimate so that you can carefully compare the costs each lender is charging you – sometimes a great interest rate comes with very high lender fees. It is also important that the lender you choose has an outstanding reputation and will deliver the loan with the terms and costs they promised. Lender failure sometimes causes deals to fall apart in the eleventh hour – something no one wants to experience if there moving van is packed and waiting at the curb.
Not receiving a Good Faith Estimate. The law requires that your lender provide you with a Good Faith Estimate of their fees within three business days after the lender receives your loan application. You should bring this with you to closing to be sure that the fees you are actually being charged are not in excess of those on the Good Faith Estimate.
Not getting a rate lock in writing. When a lender tells you they have locked your rate, get a written statement detailing the interest rate, the length of the rate lock, and loan details. Do not assume that a lender’s verbal promise that you are “locked in” will hold if interest rates increase.
Buying a home without professional inspections. Unless you're buying a new home with warranties, it's very important that you get property, mold, radon and wood-destroying insect inspections. This way you'll know what you are buying. Inspection reports from qualified inspectors are necessary if you intend to ask the seller to make needed repairs. At closing, it is important to get receipts from the seller for the work that was completed, and on your walk-through, to check it out for yourself.
Not shopping for home insurance until you are ready to close. Start shopping for insurance as soon as you have an accepted offer or you may not have time to compare providers and get the most favorable policy.
Not doing a final walk-through. You should plan on walking through your home one last time before the closing. Sellers sometimes inadvertently remove items from the home that you had understood were conveying with the home. If you close on your home and then later discover missing items, you will not have any recourse against the seller.
Signing documents without reading them. Whenever possible, review in advance the documents you'll be signing.
Not allowing for delays in the transaction. In a perfect world, all real estate transactions close on time. However, transactions are sometimes delayed. Keep this in mind as you plan your move out of your old residence and into your new one – allowing a buffer will minimize the stress in the unlikely event that your transaction does not close on time.