Buying a home can involve a lot of steps and research. It can be especially difficult in fast-moving markets like the one we are currently seeing in Houston. Be sure to avoid making these mistakes so that your purchase is a smart decision.
Making an Offer Without Contingencies
It’s not a good idea to sign a contract that commits you to such a big purchase without having some contingencies that allow you to terminate the deal upon completing your due diligence. The most common contingency is the option period which gives the buyer the opportunity to terminate the contract for any reason. It is almost never a good idea to fully waive your option period. Shorten it? Maybe. Provide a larger Option Fee? Possibly. However, a 20-minute showing is rarely enough time to get to know a home, so make sure you hold on to this important due diligence period.
Now, there may be some scenarios where you may need to waive some contingencies in order to make your offer more competitive on a truly great piece of real estate. However, you need to know the downside risk of those waivers. Talk to your Realtor and ask them to help you understand your risk.
Not Getting Everything in Writing
Even though you might think the seller or seller’s agent is a great person, you absolutely want to get all agreements in writing in the form of a contract or amendment to the contract. The last thing that you want to discover in your final walk-thru is that the seller took the refrigerator even though they verbally told you that they would leave it. In the state of Texas, there is no agreement unless it is written and signed by all parties.
Not Getting Pre-approved
There is a difference between getting pre-approved and pre-qualified for financing. Getting pre-approved is more thorough. This should involve sending your lender actual documentation to support your loan application. This will help eliminate any hurdles upfront so that the underwriting process goes smoothly. As your Realtor for reputable lender references, so you can make sure you are prepared.
Buying the Most Expensive Home in the Neighborhood
When you buy a home you always want to think about future resale. Even if you are planning to live in the home for the rest of your life, an unforeseen event could occur that requires you to sell the house. Buying the most expensive home in the neighborhood may make it difficult to sell it down the road when there are more affordable options in the area.
Buying Too Much House
When most home buyers start their search, they want to get the biggest house that they can within their budget. This isn’t always the best idea. You need to think about the costs associated with buying a bigger house such as utilities and maintenance. It’s a good idea to give yourself a nice buffer in your monthly payment budget.
Not Focusing on Location
It’s a cliché, but location really is the most important aspect of real estate. You want to make sure that you are buying in the right neighborhood, but you also want to focus on the location within the neighborhood. Some buyers make the mistake of buying a home on a busy street or near a busy commercial property because it was more affordable or had nicer features. Picking a home in a bad location will not only be an issue while you live there, but it can cause significant problems when it comes time to resale it.
Buying the Wrong House
Be sure to weigh your wants vs. needs before making an offer on a house. This will help you ensure that you satisfy your needs even if you fall in love with the staircase or the master bathroom. Make sure that the floor plan works for your personal use so that you aren’t just buying a home that looks great. The right home should also be functional.
Not Completing an Inspection
Doing a complete home inspection during the option period is critical. This may uncover some hidden defects that you and the seller did not know about. You may even get some ammunition to reopen negotiations with the seller and request repairs or compensation for the defects discovered by the inspector.
Not Doing Enough Research
Know the market and review the comparable sales in the area. Ask your Realtor to put together a list of all the active comps and sold comps from the past six to twelve months. This will give you an up-to-date snapshot of how the market is doing. You may even ask your Realtor to go back 5 years so that you can see how the neighborhood has appreciated.
Not Contacting Norhill Realty 🙂
Buying a home is a big deal, and there are a lot of details to consider when buying a home. You need a professional who can guide you through the various pitfalls. Norhill might not be the best fit for every client or location, but feel free to reach out. Even if we aren’t the right fit, we would be happy to help point you in the right direction. See the form below to connect with an agent today. Or call 713-869-5700.