ey there, today we’re going to talk about how to avoid the most common first-time homebuyer mistakes, that you may not be aware of.
1. Localized Information
Well, in no particular order. What are the first things I would tell you as a first time homebuyer, would be to avoid getting the National Statistics of real estate. What you need is localized information. Remember! Nobody cares what’s happening in New York Florida or Arkansas. It doesn’t relate to California real estate and on a deeper note, what’s happening in LA is totally different from what’s happening in the IE, the OSI, and San Diego. So you need to get localized information on the neighborhood you want to buy.
2. Avoid Getting Caught Up And The Advice Coming From All Different Angels
In the next thing, I would tell the first-time homebuyer to do is to avoid getting caught up and the advice coming from all different angles. Remember you’re a first-time homebuyer, you’re giddy, you’re excited, you’re talking to everybody you trust in regards to your purchase, and rightfully so. Then, they’re going to share information with you and stories about how it was for them when they bought their first house.
The problem is if uncle Paul bought a property in 1960, the rules regulations and processes that were in place when he bought don’t pertain to today. A little bit deeper than that, how about somebody buys a house in 2006, that’s not too long ago right. Everything’s still pertinent, everything is still you know in place, well not necessarily so. The mortgage crisis of 2008 turned our industry upside down and the way we work and do business is totally different from what was five years ago.
3. Hire Your Own Agent to Negotiate It for You
Next thing I would tell you to do, is to hire your own realtor. First-time buyers, you need your own representation. I am a proud member of Trulia, Zillow, and Movado.com. Those are great websites where anybody can go on 24/7 and get pictures, video, satellite maps, details, and pricing information. However, what I’m finding is first-time buyers are using those websites and contacting the listing agent directly. Thinking they’re going to get a steal of a deal. What they don’t realize is, before that buyer even came into the picture, the seller and the listing agent had a legal contract, creating a fiduciary responsibility to the listing agent, to make sure that they get the highest attainable price for the seller.
Now, do you think that a buyer was coming in after that relationship has been finalized and legalized? Do you think that that buyer is going to get a good deal? not necessarily. The seller and the listing agent are going to try to check the price up regardless. They have a legal responsibility to do so, so hire your own agent to negotiate it for you.
4. Hire a Full-time Experienced Realtor
Then, I would tell you to do is a first time home buyer in regards to finding your realtor. If you’re a first-time home buyer you need a full-time real estate agent. Part-time agents aren’t going to cut it for you. You have lots of questions, you need your handheld is the entire process, and most likely a part-time agent isn’t going to have the time, to dedicate to you and your family and your needs in the process. So hire a full-timer.
5. Get Your Loan Pre-approval ASAP
Next thing I would tell you to do as a brand new home buyer, you need to get your loan in place before you ever step foot into that first house. The reason why I say this? Is because what happens if you find a property that you absolutely fall in love with? Then you go see the lender and find out you don’t qualify for the house. With a heartbreak, you’re not going to be able to get anything near that property, you would have known that if you want your loan and your qualification took care of in the first place. So get your loan, pre-qualification pre-approval letter, taken care of before you go look at any houses.
6. Avoid a Lot of The Static Regarding Overpaying for Properties
The next thing I would tell you as a first time homebuyer. Please, avoid a lot of the static regarding overpaying for properties. Remember the way we write offers here at Prudential California Realty, is we keep your appraisal contingency in play. For example, if you have $100,000 property and you really love it, we tell you to write it up for 105. You say well that’s $5,000 more than the list price.
Keep this in mind with your appraisal contingency. If the property appraised is at $100,000. The bank will not allow you to pay more. However, you have your foot in the door of escrow. And now, you’d be able to renegotiate the sales price with the seller at the appraised value, but you will definitely never pay more than your bank says that property is appraised for.
7. Understand The Differences Between a Short Sale, a Bank-owned Sale, And a Standard Sale
Something else I would tell you to do as a first-time home buyer. Make sure you understand the differences between a short sale, a bank-owned sale, and a standard sale.
a. Short Sale
: 90-270 days to complete. No guarantee of approval.
b. Bank Owned/REO
: 15-45 days to complete but no repairs made.
c. Standard Sale
: 15-45 days to complete.
I can tell you if you’re really in a rush to move, short sales are going to be off the market for you because they take six to nine months to get approved, but if you have six to nine months to kill go look at short sales.
8. You Need to Act Fast Once You Find a Home You Want
Something else I would tell you as a first time home buyer, one of the most common mistakes. Is not acting as soon as they see the property. Sometimes they think that the property is going to be there in a week or two. Remember, in this market, the best property sell in five days or less with multiple offers and sometimes even bidding ores. So you need to be proactive and you need to be really on point as a first-time home buyer.
Those are the most common mistakes, I see home buyers making. Thanks for visiting us and read our article. See you next time.