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How to Avoid Home Purchase Pitfalls
Though first-time home buyers are typically the buyers that experience the most difficulty in getting started with the purchase process, any home buyer can benefit from a few tips on getting through the purchase process quickly and efficiently while ensuring that a nasty financial surprise is not around the corner.
Saving money appeals to consumers of all types and during a transaction in the hundreds of thousands of dollars, avoiding costly financial mistakes can represent a significant potential savings. Through taking these tips to heart, you can not only help yourself experience a smooth transaction, but you will also better protect yourself from repercussions after the purchase has been completed.
The Importance of Pre-Approval
Getting pre-approved is a great first step to take as you pursue a home purchase, but the amount you get approved for should not always be taken as your perfect spending amount. Often times, the amount you are pre-approved for is based off of monthly payments that might be outside the range that you are prepared to pay.
This is significant and before you take a pre-approval amount as truth, make sure that the terms included in that approval are acceptable to you. In addition, a pre-approval can save you from credit problems down the road as you cannot get qualified for a particular property after making an offer. Getting an accurate pre-approval (not just a pre-qualification) can save you both time and money during a real estate process.
Surround Yourself With High Quality Experts
Your real estate agent, lending officer and real estate lawyer, if you use one, make up a team of experts that you are going to have to rely on during your home purchase. Because you are basing a very large cash expenditure on the advice of this team of experts, you need to choose wisely when it comes time to hiring each position, especially your real estate agent.
Don’t be afraid to interview a wide range of realtors to get the perfect real estate agent for your transaction. An experienced agent will save you thousands of dollars down the road as they will be better equipped to negotiate in your favor and can offer better advice on the types of homes you should be looking at.
Investigate A Sales Price Yourself
You would not begin to accept that a head of lettuce is worth $40 just because your local supermarket priced it as such. Similarly, you and your real estate agent should not simply blindly accept that a home is worth the price it is listed at. Any good real estate agent should work up a comparative analysis of the property, comparing its prospective sales price with recent sales of similar homes in the area.
It is a common practice in the real estate industry if a particular seller is not in a big rush to list the home above market price to see if there are any highly motivated real estate sellers that might be extremely interested in the property. If that fails, the price gets lowered to what the market dictates. Don’t be that over-aggressive buyer paying more than what the home is worth. By doing a full analysis of the sale price, you can protect yourself from over paying for the home you desire.
In the context of a $300,000 home sale, saving a few thousand dollars may not seem like a large portion of the transaction, but when you think about the other things you could use that money on, you will quickly see that saving a few thousand dollars can be a significant event. By following these tips and doing your homework on a potential home purchase, you can better guard yourself against either overspending for a property or incurring unnecessary costs.
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We respond right away! -Colleen & Joe Lane, Realtors®
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