Seven Homebuying Disasters To Avoid
Whether you are a first time home buyer or a happy home owner
who wants to refinance an existing home loan, there are some
cardinal "dos" and "don'ts" to follow. For many, home ownership
is the biggest investment in their lives and that could be the
reason why some people act irrationally, as if they purposely
want to sabotage the deal. Follow these simple rules and you
will be sure to make your experience difficult and unpleasant,
if not a complete disaster.
Don't get pre-approved or pre-qualified for a loan; lose your
dream home to someone else.
Being pre-qualified shows some commitment on your part to both
the mortgage broker and the seller. Being pre-approved is an
even better step to take. The lender knows your financial
standing and is able to present you with the loan deal. If you
are neither pre-approved nor pre-qualified, a real estate agent
representing the seller will not treat you seriously, and the
property you want will most likely sell to someone else during
the time you waste securing a home loan. Go ahead and
procrastinate, you didn't want that house anyway.
Make verbal contracts only. Talk is not cheap.
Since they are not enforceable in most states, make sure that
the details of the deal regarding who pays certain costs or
necessary repairs are agreed on verbally, and only verbally.
Similarly, when the lender tells you that your rate is locked
in, don't ask for written evidence. You might be in for a big
surprise at the closing appointment, but who doesn't like
surprises?
No need to be discriminating. Choose a lender by using only one
criteria.
A favorite criteria of most people is to go with a bank that
offers the lowest interest rate, without any consideration of
the true cost of the loan. Even if you know how to calculate it,
you'll probably choose the lowest rate loan. The chances are
that the lowest rate bank is charging a lot more in fees and
points than others, but who has time to shop around? Life is
busy. Others, usually more cautious people, go with the bank
where they have their checking account. After all, your bank
loves you and would not wish any financial harm, right?
Pay more than you should. Choose the seller's real estate agent
to represent you.
It is truly the best option. Rather than asking friends or
colleagues for referrals, picking up the yellow pages or
searching online for your own agent, simply go with someone
whose job it is to get the best deal for the seller. Who cares
about conflict of interest. Be house poor.
No need for tedious professional home inspections.
After all, what could go wrong? Leaky roofs, plumbing problems,
termites, asbestos; all a minor nuisance. If electrical problems
happen to start a fire... well, that's what smoke detectors are
for.
Don't bother reading important contracts. Just sign all
documents.
They are long, difficult to read and understand and are very
time consuming. Rather than familiarize yourself with them ahead
of time, just wait and sign everything at your closing
appointment. Besides, what you've signed may open the door to a
world of surprising homeowner adventures you could never have
imagined. More surprises for you to enjoy!
Buying a house will most likely be the most important purchase
you make in your life. Don't mess it up!
There are countless websites, magazines, books etc with which
you can empower yourself in this daunting task. Don't let
yourself be taken advantage of; learn all that there is when it
comes to buying a home. If you want to fail, just follow the
preceding steps. But, success at negotiating the best price and
the best loan rates can be achieved by simply avoiding these
foolish and costly mistakes. The lenders and agents are counting
on you to walk blindly into your home purchase. For them, the
bottom line is getting the commission. They are hoping for as
quick a sale as possible, and they would like you to be a
typical uninformed client who makes decisions with their hearts
only and not their heads. Make the agents work for you. Take the
extra time, arm yourself with the knowledge of home buying and
lending practices in order to make informed, sound judgments and
decisions.