The 7 Costly Mistakes Home Buyers Make When Looking For Their Next Home
I see buyers making common and costly mistakes all the time. In fact it's why I became a licensed buyer's agent in the first place.
These mistakes can be avoided and risks mitigated when you know what you're doing and dedicate the required time and energy to each and every property you consider buying.
In this blog I'll share the top 5 mistakes so you don't have to fall in to the same trap.
These mistakes cost buyers money because of lost time, lost opportunity or ending up with a dud asset.
Home buyers spend on average 6 months to make a purchase and I'm not going out on a limb here when I tell you, in most cases, that's 3 months too long.
Because they're not property experts, most buyers don't know what's involved in spotting an investment grade property from a dud and they don't know how to ensure the 'legal stuff' is in good shape either.
Mistake 1. Ill-defined search criteria
Every heard that idiom "throwing spaghetti against a wall in the hope some sticks"?
Not having a defined criteria is a recipe for spending too long searching and not being able to quickly tell if a property is what you're looking for.
It can also mean you fall for something based on emotion that doesn't tick enough of your boxes.
In a rising market, time is money.
Literally tens of thousands of dollars that, over the lifetime of your loan, equates to that's oodles of interest (yes, I can do the maths but I don't want to scare you away too fast).
TIP: Spend time up front to define your "must haves" and your "nice to haves" so you can zero in on properties that match your criteria faster.
Mistake 2. Thinking the Real Estate Agent is there to help you
The Real Estate Agent is hired by the seller to represent the best interests of their client.
Their job is to get the best price and terms from the buyer for their client.
So, whilst they may seem helpful and friendly, never forget they are ethically bound to act in their clients best interests.
Never be fooled into thinking they are giving you inside info or special treatment because 9 times out of 10 they're not.
They're just making you think it so they can win your trust and use it to their client's advantage when it come's time to negotiate.
EXPERT TIP: Ask direct questions of the agent, don't give away information about your budget or situation and assume they are stretching the truth.
Mistake 3. Skipping critical pre purchase checks
Dotting every I and crossing every T when evaluating a property is painstaking, tedious and can drive anyone bonkers.
Now do it for several properties and you're seriously over it.
Look I get it better than anyone.
But when buyers skip getting a legal review of the contract or a building and pest inspection they're opening themselves up to serious risks that could cost them big dollars.
Fallen in love with that beautiful ensuite bathroom?
Now imagine it was was built out to the boundary illegally.
Best case scenario you'll have to apply for a retrospective permit or, worst case scenario, be ordered to rip it down.
It happens, I'm telling you.
A building and pest inspection is designed to pick up minor and major defects so that you can make an informed decision about the purchase.
The detail in the report can also provide great leverage in negotiations.
Checking the title, zoning, easements and overlays can turn up some surprising info about the property.
Fancy living in a flood zone, anyone? No, thanks very much.
Because the pre purchase diligence steps are time consuming and costly to arrange, many buyers get jack of it after a few properties and fall in to the fall sense of security that they've learned enough from the last property or two to pick up any major issues.
I'm a buyer's agent. I do this for a living and I NEVER purchase a property without completing the pre-purchase diligence.
There's just too much at stake and when this stuff goes wrong, it goes really wrong.
EXPERT TIP: Invest (yes, invest!) the time and the money to get experts involved in checking over the contract and building of every property before making an offer/bidding at auction.
Mistake 4: Overlooking fatal flaws
There are some attributes in a property you will never be able to change and usually that's a property's particular location or something on it's title.
If there's a flaw in either of those that would, by an ordinary person, be considered a fatal one but you're still set on buying it then your emotion has got in the way.
You might be attracted to it because it seems a bargain compared to other properties. It is a bargain for good reason: the market has priced in the property's fatal flaw and its price reflects its value in the market (aka rock bottom).
EXPERT TIP: Walk away from properties in a terrible location or with a serious zoning or title issue. When it comes your turn to sell it, you'll be the one having to sell at the bargain price.
Mistake 5: Unable to quantify a property's market price
By far the most common and the most costly happens at the tail end of a search when it comes time to set a purchase price limit.
Buyers who haven't spent enough time tracking the market are unable to effectively compare properties against one another.
This leads them to set their limit too high or too low.
Setting it too low happens when a buyer can't face the reality that their budget can't buy them what they want in the current market. They keep missing out and end up angry and frustrated only to repeat the process on the next property.
Pricing a property too high can be spotted by a real estate agent who will squeeze the extra dollars out of you in a negotiation.
EXPERT TIP: Track the market every week and run a thorough comparable sales analysis to price every property you pursue. Being armed with relevant recent sales gives you the edge in negotiations.
Hi, I'm Narelle Glynn and I'm a licensed buyer's agent in the business of securing the best properties on the best terms for my time-poor clients.
If you'd like an expert in your corner book a free discovery call with me - click here.