Mistakes Buyers Make When Purchasing a Home
Buying a home is a big decision. It's important to make sure you're ready to buy real estate as it is typically at least a six-figure investment and you don't want to make any mistakes when purchasing a house. There are a lot of things you can do to ensure you avoid the common mistakes buyers make including reading as much information and high-quality resources as possible.
After educating yourself as best you can, you don't want to rush into the purchase, instead do more research. Learn about local Real Estate Agents and Lenders who will be assisting you in your transaction before you start seriously shopping for houses for sale. At Raleigh Realty, we always recommend our buyers and sellers interview more than one agent because we want to make sure they feel comfortable with the Realtor they choose to work with.
If you are a first time home buyer, you'll definitely want to make sure you spend time researching and learning about consistent blunders buyers make. This research is going to save you thousands of dollars, as well as a lot of time and effort in the home buying process. There is a lot of great information online for Millennial home purchasers to learn about buying, selling, and investing in real estate.
Buyer Mistake - Hiring the Wrong Real Estate Agent
The biggest mistake buyers make is they hire the wrong Real Estate Agent. This is by far the most important mistake because it reflects on the four following mistakes as well, that's why it is number one on our list. If you're going into battle do you want someone who has never been to war leading you, or do you want an accomplished general, who studies the tips and tricks that help buyers find great homes at the best possible price? Whether you're buying a resale, new construction or a luxury home, there are different strategies to help you buy the best house!
Are you better off renting or buying is a question many of our clients in Raleigh ask. There is no decisive answer, there are only questions we can ask to help determine if someone is ready to buy a home or to rent instead. Here is a great way to learn about the pros and cons of buying and renting real estate.
Hiring the wrong Real Estate Agent is the biggest mistake a buyer can make because it's going to come back to haunt them throughout the entire buying process... and worse, the wrong agent could potentially leave buyers with a huge financial problem, after all, is said and done. That's why important to avoid the mistake of choosing the wrong Agent and find a great Realtor who is going to help you secure a great financial investment.
Top Real Estate Agents know what the best deals are and they're going to help you find one. Not every home is priced with room to negotiate and often times the best deals are ones you will need to offer full price on. You shouldn't feel like you're losing when you offer full price if it's a great deal! Trust your Real Estate Agent to help you find the best home possible, at the best possible price even if that means you're making an offer over asking.
There are Agents who will not show you homes unless you are prequalified, and typically these are the Agents you want to work with. The reason they won't work with you until you're qualified is that they recognize you're doing yourself a disservice if you aren't already prequalified. You won't be able to know for sure if you're shopping in the right price range. Find money first!
Buyer Mistake - Not Finding Money Before Looking at Homes
Finding a lender is an important step in the home buying process. When you are shopping for mortgages make sure you're aware of the local mortgage rates in your area because they change on a daily and weekly basis. For instance, here in Durham, the mortgage rates are the lowest they have been in the last 90 days, making it a great time to close out a loan and save $30-$40/month over the course of 360 months!
When you're searching for a lender you need to be upfront and honest about EVERYTHING. They need to know exactly how much money you bring in and your debts. If you expect to tell them you make $45,000 when you really make $30,000 they're going to find out. You won't be able to proceed towards closing unless you can find another solution. This is why it's important to set the upfront expectation with buyers that they need to be completely honest about everything from the beginning.
A Real Estate Agent is typically juggling a lot on their plate and to be showing you homes in a price range that you're unqualified for is a huge waste of time for both you and your Realtor. As a buyer, you have to understand you will be doing more damage than good if you are looking at homes that are not within your price range. You will begin to confuse yourself on the amenities you want and need, if you're viewing houses you can't afford.
Some things you'll want to look for in a Lender is the options they provide you. Some lenders here in Raleigh have first time home buyer programs that require $0 down
Homes for sale in Raleigh, NC are selling FAST, and a lot of the best properties are in multiple offer situations so it's imperative you have a pre-qualification letter available. Don't just assume that you can spend a week thinking it over, especially here in the Raleigh area.
Buyer Mistake - Buying in the Wrong Area
One of the worst things you can do is buy a home in the wrong area. You need to make sure you know the area you're buying in and you'll want to make sure it's both somewhere you're going to enjoy living and live comfortably. Hiring a strong Real Estate Agent to represent you, they will ensure you find the neighborhoods you love BEFORE you start looking at homes for sale in that area. It's a common mistake, especially for first-time buyers.
A lot of people move to Raleigh, North Carolina. It's been one of the fastest growing cities since 2000. This means that a large number of people who are moving here more than likely aren't overly familiar with the neighborhoods. Let's make this simple, if you don't know the neighborhood, don't buy the home. Most people want to go see the homes for sale that they find online without actually knowing what the neighborhood is like. Then when they drive through the neighborhood they know right away it's somewhere they don't want to live. This is not only a waste of time for you it's a waste of time for your Real Estate Agent.
Once you're certain it's the right neighborhood you want to make sure the future outlook of the area is good as well. Sometimes it has more to do with timing than it does with anything else. A lot of buyers think it's a great time to buy when the market is 'good.' It really depends on what good means. Do you want to buy a house when it's the highest the market has been in years? Not typically. You want to buy a home when the market is either turning around or when it's at it's bottom. This is the best time to invest in real estate. Though, one exception is if you plan to live there for a long time than buying a home is a safe investment as long as you can afford it at any time. There are better times than others though.
Buyer Mistake - Becoming Overly Emotional when Buying a Home
If you're looking at homes for sale online, you should understand that 'pictures of a house online is different than looking at the home in person." So much so that some clients have actually not recognized the house they saw online and the one we were standing, even though they were the same property. It's true that greater than 90% of buyers will search homes for sale online, and it's important to not fall in love from a picture.
A Real Life Story
Homes for Sale in Raleigh are on the market a matter of days, sometimes hours if it's a good deal. You have to be ok with the potential fact you may not end up being able to buy the home you want. One of our clients here at Raleigh Realty put an offer to buy a home for sale in Apex for full price. The home sold for 10% more than what they were asking the first day it hit the market. Apex, NC was recently ranked as the #1 best place to live by Money Magazine so it makes sense why so many people want to live in the area. A month later we found the perfect home at a great price, just south of Cary in a town called Holly Springs. We set up a showing, and met at the office. Looked the property up on the MLS to go over it once more and it was listed as 'contingent,' meaning it went under contract just hours after it hit the market. The home sold for over asking price in less than two hours. This is when the emotions took over.
The client didn't say it, however, it was her body language and tonality that expressed disappointment, almost as if she was ready to give up. The two homes she found and liked sold for 10% more than asking price, or in less than two hours! So I told her do you remember when we first met and I said that it was going to be an emotional roller coaster ride? She said she did. So I explained that right now she was at the bottom and one of the most common mistakes buyers make is letting their emotions control their decision-making process. Right now all she wanted was to be at the top of the roller coaster ride, even if it meant buying a home she didn't like - which is exactly what she tried to do a week later...
We found a home for sale in Cary, on a main street, priced $30,000 more than the original two homes. If you're familiar with the Cary area you know the real estate for sale is priced much higher than in Apex or Holly Springs. She wanted to make an offer on a home that had been sitting for over 200 days, at the max of her budget, and on a busy road. This is because of the pain she experienced with the other couple houses she tried to buy. My next question was on a scale of 1-10 how much do you love this house... she responded with a 7. The other two homes were 10's. "Do you really want to buy a home, on a main street, for your max budget that is only something you kind of like?" I asked.
This is not uncommon for the Raleigh market, especially if it's a great deal. The pool of buyers is only increasing in the Triangle area after experiencing the largest percentage increase in rental prices in the country.
If you're looking to buy a home in Raleigh you'll need to ensure you have a proper plan set forth, and are able to execute it when the time comes!
Buyer Mistake - Not Having a Proper Plan when Buying a Home
If you're buying a home you need to have a proper plan set prior to looking at homes. If you don't set priorities from the getco you're going to get extremely confused when you start seeing all the different features and amenities in the different homes. Pretty soon you might want all of the amenities from the six different homes you saw, included in one house. Chances are that will take you into an entirely different price range, or an entirely different neighborhood, maybe even city.
We've seen this from buyers first hand. The homes for sale in MacGregor Downs, a neighborhood in Cary, are priced starting in the high 300's and go north of 4 million dollars. Homes in this neighborhood are priced in a way that reflects the location, amenities, size, and a number of other factors. Sometimes buyers will see luxury homes for sale online that are outside of their price range and fall in love with the home (well, obviously the home is going to be better, that's reflected in the price) and decide they want 'those luxury' amenities. This is why when we sat down we created a list of priorities because there are things you need (3 bedrooms and 2 bathrooms) and things that would be nice to have that wouldn't meet your price in this neighborhood (a pool and movie theatre).
If you have a strong idea of what you're looking for, when you find it you will know. You don't have to worry about overpaying for a house or making a bad decision if you have a strong Real Estate Agent that you're working with. If you are buying with a lender than an appraisal will be required ensuring that you're paying a fair price.
Having a proper plan is going to help you, your Realtor, and everyone involved in the sale. If you're buying and selling a house at the same time, it's even more crucial to make sure your plan is set. Not having a proper plan is going to lead you down a path of confusion and you'll be six months in when you realize you have to start back from square one!
Final Thoughts on Mistakes Buyers Make:
Buying a home should be fun, so enjoy the process and avoid these common blunders buyers make.
The home buying process can be stressful at times. Finding a home for sale in a sellers' market has it's challenges, which only makes it more imperative that you're working with a top Real Estate Agent. Knowing what to expect before you get to the closing table is a great way to avoid sticker shock when it's time to close.
If you're considering buying a home in Raleigh or anywhere in the area let us know. We are happy to share our knowledge with you ensuring you buy the best home at a great price.
If you're thinking of buying a home to flip you'll want to make sure you have the proper contractors, systems, and processes set up prior to moving forward with the purchase. Buying a foreclosure has it's pros and cons as well. You can buy both properties at a discount. Do your research, have a plan, and find a great Real Estate Agent to help you!
Buying Raleigh Real Estate is something you should chat with us about, we are professional, low pressure and want to help you find the best home possible!
Hi there! I'm Ryan Fitzgerald, a REALTOR in Raleigh-Durham, NC and the owner of Raleigh Realty. Chances are you and I share a similar passion, Real Estate! I also have a passion for technology, sports, and people. Would love to hear from you. Drop me a note in the comments section below and feel free to share this article socially!