Looking for a home? In this sellers’ market, it’s critical to avoid common home-buyer mistakes.
There are a lot of challenges to finding your dream home if you’re house hunting. For one, there are fewer homes on the market. Current homeowners who took advantage of record low mortgage rates during the recession don’t want to move if it means getting a new loan with a higher interest rate. Despite the fact that rates are still quite low relative to what they’ve been historically, many owners aren’t selling. There are fewer new construction homes available as well, due in part to a lack of labor. Many builders left the industry after the housing market collapsed and still haven’t returned.
Since supply isn’t meeting the current demand, the homes that are on the market are getting more expensive. Home prices rose in 97 of the country’s 100 largest metro areas last year, with an average increase of 5.6 percent.
In such a competitive market, buyers need to have all their ducks in a row before they even begin looking at properties. Low housing inventory encourages multiple offers and bidding wars, so before you put in an offer, you need to be prepared to fight for the home you want. Here are four home-buying mistakes to avoid if you want to achieve your real estate goals.
Not having the right team
I always advise buyers to surround themselves with a home-buying “dream team” to help them navigate their real estate transaction. Having a buyer’s agent to help you in the house hunting process ensures that there’s someone in your corner looking out for your interests. You’ll also want to hire a home inspector to help you evaluate a property before closing and find any hidden issues. Lastly, but definitely not least, it doesn’t hurt to have a trustworthy mortgage lender and real estate attorney on your side. Ask your agent, family members, colleagues and friends for recommendations.
Forgetting to prepare your finances
If you’re thinking about buying a home, you’ve probably already started saving for a down payment. That’s a great first step, but you should also check your credit and get pre-approved for a mortgage before you head out on your house hunt. Pre-approval means your lender has committed in writing to funding your loan if the home appraises out in value. This makes you a stronger buyer because it assures the seller that you’ve already secured the money for the purchase, and it might give you a leg up over someone without it.
Before you start your search, set your budget. Know how much you’d like to spend and how your mortgage payments at that price point would fit into your monthly expenses. Don’t let yourself stretch your budget to buy a more expensive home if you know you can’t afford it.
Focusing too much on the house, ignoring the neighborhood
You’ve probably got a wish list of features you want in your new home that’s a mile long, but do you have a neighborhood wish list? Pay attention to the area around the homes you want, not just their shiny new kitchen appliances or pretty bathroom tile work. Are the other homes on the block well-maintained or are they falling into disrepair? Are there parks, bike trails or other amenities nearby? How good are the area’s schools?
Look for a home in the best neighborhood you can afford, even if that means settling for a smaller or more dated house than you could have purchased in a less expensive neighborhood. You can always update the house, but there’s nothing you can do to improve the neighborhood. Remember: The neighborhood around your home affects its value, and a better neighborhood will help protect your investment.
Passing on a house that’s “ugly”
Too many homebuyers want a house to be perfect the day they move in. They want an Instagram-perfect place, and they’ll turn down any home that doesn’t live up to their expectations. Don’t fall into this trap.
Right now the home inventory is so tight – and so pricey – that it could be nearly impossible to find a perfect, move-in-ready home in your budget. Focus on the essentials like the number of bedrooms and bathrooms, the surrounding neighborhood and the overall quality and condition of the structure itself. Ugly wallpaper, dated light fixtures and dirty carpet are all things you can fix after you move in, and may even help you negotiate a better deal on your purchase.
Jeff Barchi has been a REALTOR® and one of the best real estate agent Arizona expert and managing homes for sale in the Greater Phoenix area since 1999. He is ranked in the top 1% of all real estate agents in Arizona in Greater Phoenix, two time winner of top 40 Realtor AZ under 40 award, and the top 2% of all agents nationwide. In 18 years Jeff, as a leading Arizona real estate agent, has participated in approximately 900 transactions, i.e. homes for sale in Arizona, averaging approximately 50 per year. To put this number in perspective, the average Realtor AZ closes 11 transactions per year. If you are looking for the best real estate agent Arizona expert, Jeff Barchi is your guy. His real estate firm has been praised as the best Phoenix real estate agent, he has been a very successful Scottsdale real estate agent and Paradise Valley Realtor.