Don’t Miss Out on How to Handle Common Home Buying Pitfalls

Oh the stories I’ve heard and even witnessed with Kamloops Home Buyers, as they search for the perfect place to call home.  

I thought, that what better way to illustrate being ready to buy a home than to present the potential pitfalls that you’ll come up against and how best to handle them. Dodge them at all costs.

So what are these typical, all too common home buying pitfalls?  Do any of these describe what you went through when trying to buy a home? Perhaps you’re a first-time Buyer that wants to avoid any problems now that you’re ready to buy a home.

Don’t be the Buyer who didn’t read this here and missed out on getting educated on what potential pitfalls you can come across when it’s time to buy a home.  If you keep reading, you won’t miss out and you’ll be well advised; ready to buy a home, avoiding the pitfalls!

What are some common home buying pitfalls? Let’s uncover them now.

Can’t afford the home you love

Nothing worse.  You find the perfect home, only to later determine that there’s no way you’ll be able to buy your dream home, because you can’t get a loan! Yes, painful. Cruel.

Your credit wasn’t what you thought it to be, as you never bothered to check your credit report. You didn’t save enough money, as you thought $2000 was enough to buy a home.

Remember, those collection accounts from years ago? Now you remember; those have to be taken care of before buying a home. Your credit is very thin. You have no credit basically. You always thought it was best to pay cash for everything. Paying cash may be great, but when you need to get a loan, Lenders are going to want to see some history of paying your bills on time.

Avoid the agony and get yourself Pre Approved BEFORE you even start the home search process. Have your Mortgage Lender review your credit, income and assets.  Provide them with your pay stubs, bank statements, tax returns and credit report access to determine the price of a home that you can afford to buy.  You’ll even want to make sure you double check your true affordability for your particular lifestyle; nothing worse than not having any money in your bank account to do the things that you enjoy.

Home wasn’t the best fit for you

You stepped across the front door welcome mat and were blown away by the home’s style: with gray walls and a bit of industrial, chic, mid century, comfortable furniture all mixed in, and look at all their toys, you thought; Apple Computers in every room and an imported coffee machine that sits on the Kitchen counter top right next to the sleek Toaster oven.  One room was a dedicated exercise room with top of the line exercise equipment; perfect, on your list of things to do; get in shape! And then there was the office set up just how you’d like it, minimal, simple designs.

Has this ever happened to you where you just love the home’s interior and how they decorated it? It can really cloud your vision if you don’t strip it all away to look at the home itself.  The home described above had a closed off Kitchen not open to the family room area when you really wanted an open floor plan home.  You moved in and discovered the home’s layout isn’t practical for your lifestyle; you wanted an open layout.  You made a huge mistake.  You bought the home based on it’s showcased style. You’re not buying a home’s content, you’re buying it’s floor plan, it’s bones. Don’t get all giddy from the furnishings, unless they’re part of your Real Estate purchase.

Home took forever to close on

You know the expression; a watched pot never boils.  Have you ever experienced that when trying to buy a home? You wait and wait, you drive by the house a hundred times, and you wait.  Why is this home buying process taking so long, you wonder.  You’re anxiously awaiting to be able to call the home your own. This can be a common issue when buying a foreclosed property that is bank owned.

Understand the risks of buying a foreclosed property beforehand. A foreclosed property is usually owned by a Bank, with the foreclosed property, typically comes longer waiting times until you’ll be able to close on your home. Did you know this before you got started in on presenting an offer on such a home?  If you’re considering buying a foreclosure, make sure you’ve hired a Real Estate Agent who knows these type of property transactions. A foreclosure can take longer than a traditional home sale, particularly if it’s owned by a bank and court dates need to be gotten.  Everything just seems to take longer when dealing with a Bank. There are usually a lot of files on their desk and it’s a process for your file to get to the top of the stack.  

Discovered underlying issues to your home after you moved in

Did you decide against a home inspection or hire your friend’s uncle Billy who dabbles in home repair when he’s not teaching yoga at the local YMCA? Your home has a structural issue that the Seller had hid and now after several months you discover that one side of your home and it’s 3 bedrooms are all tilting.

Make sure you think carefully about the option to skip a home inspection and always hire a skilled home Inspector.  It’s important to know what is under, that is visually able to be seen. What’s hidden is what the Inspector reveals. Once any imperfections, minor or major will be made visible, you are then armed with valuable information regarding your home purchase. Now you’re able to make an educated decision on whether or not you’ll continue with the home purchase. A home inspection is not a guarantee that the house is 100% but goes a long way to ensure your investment is a sound one.

Home appraises for less than your home purchase offer

Understand the options when this is a possibility, particularly when folding closing costs into the home’s sales price.  The appraisal comes back lower than the purchase price.

You will have 3 options; pay difference between home’s value (appraisal) and purchase price, Seller reduces sales price or you cancel the home purchase. Your Lender will not lend you money for more than the value of the home, so consider what you’ll do ahead of time when considering what price you’ll offer the home Seller.

You should plan on your Real Estate Agent’s direction on a home purchase price, so you know how your offer price will likely pan out.  

You paid lower taxes this past year, affecting your home purchasing power

What, you’re only approved for that amount; yet you make so much more money!

How much do your write off from your taxes each year?  When a Lender considers your loan value, they look at your net earnings and not your gross income. If you have a way in twiddling the numbers down so you have to pay less taxes, you’re also twiddling away your home purchasing power.  Business expenses incurred reduce your taxable income and hence, you net income.  If you’re a business owner, self employed or you utilize a lot of tax saving deductions, you might want to think of lessening those deductions if you have your eyes set on qualifying for a larger home loan.

Lost the home you loved over wanting a good deal

Knowing your local Real Estate market will determine how much of a good deal you’ll be able to secure.  Simply coming in with a low ball offer when the market won’t bear it, will result in great disappointment; you’ll likely lose the home you love.

Various markets, whether a Seller’s, Balanced or Buyer’s will have strategies that work in each market.  Discuss this with your Real Estate Agent who can direct you in presenting an offer on the home you love.  

If you’re really not serious about buying a home and are more interested in getting a bargain basement deal, then you simply wanted a good deal and gambling in a Seller’s Market will prove futile.

You now live next to the neighbor from hell

No, not this neighbor, tell me it isn’t so! We’ve all heard the stories of the neighbor from hell.  Run.

Do your neighborhood homework before buying a home. Drive by during the evening hour and weekend hours if you can, to see what the neighbors are up to.  Of course, they’re far and few between, but wouldn’t you like to know before you move in and discover that your neighbor loves to blast loud music from his backyard?!

It all boils down to this, in closing:

Know what you can afford, choose your new home with your head and not your heart, understand timelines involved in the home you choose, have a home inspection, understand the effects of an appraisal, know your purchasing power, don’t over deal and find out about the neighbors.  Of course, this doesn’t cover all potential home buying pitfalls, but it will get you started.  Happy home buying!

Now you’re armed with being able to actually avoid the common pitfalls in home buying.

© http://imagineyourhouse.com/blog/dont-miss-out-on-how-to-handle-common-home-buying-pitfalls/