I have 18 years of experience in real estate and I have seen too many Michigan home buyer mistakes that could have been avoided. I want my buyers to make good strong financial decisions. I want YOU to avoid a money pit. I want You to make money when you sell the home in the future especially if you have to sell sooner than you planned. Here are 5 costly home buyer mistakes that I hope you avoid. Especially if you are a first time home buyer or a buyer moving to Michigan
- Not planning
This house is going to be one of your biggest financial assets in the future and a source of many memories. Think about drive times to and from work. Drive time to family and friends homes. Also drive times to places you like or go a lot.
Also think about what your needs and wants in a home are. By putting them down on paper will help you crystallize what is most important to you in your home search. For example your wife may want a kitchen that opens to the family room and you need a 3 car garage. Those are two important priorities to stick to. Knowing what is most important to you will help you make better decisions. Remember no house will be perfect. No house will have everything you want. So when you prioritize what is important to you then finding your dream home will be easier.
- Listening to a lender and taking on too much debt.
One of the first things people should do when they are thinking about buying a home is figure out your own budget. Do not listen to a lender and get over qualified. You should know what you can afford in a monthly mortgage payment before you visit a lender. You need to be comfortable with the payment. Don’t forget to include taxes and insurance in your payment projection.
You want to be able to live and not be house poor. You don’t want to lose the house in foreclosure because you can not afford it. Remember house buying is all about you. What you want, what you can afford. Your agent should be there to provide the information you need to make a good decision. Not to rush you, not to tell you that you should make a choice out of just 3 or just 5 homes they provided. A good agent wants you to be a smart informed home buyer!
- Not differentiating between needs and wants
Finding the dream home you want can be a frustrating process. If only this large kitchen was on that homes property with the third house’s finished basement. With some many features to look for in a potential home, finding just the right home can become difficult and confusing. Breaking your dream list of desired criteria into two categories, must-haves and wants, will make the process easier. Do you really need a pool, or could you do without one? What about a second bathroom? Could it be in the basement, or could it be a half bath? Understanding that a perfect home doesn’t exist and the difference between your “wants” and “needs” will make the home selection process much easier and smoother.
I have seen buyer’s finally end up with a home that doesn’t have their needs fulfilled and then they are having to sell and re-buy again. One couple needed good schools for their daughter and wanted a finished basement. They found a house with an amazing basement but the house was in a so-so school district. They ended up selling in 2 years to move to a good school district. Remembering what you really need in a home will keep you from making the same mistake.
- Not recognizing the whole value
Some home buyers buy a home based on decor and furniture of the seller. Remember it is not going to be there when you move in. It is the same way with wall colors. I have had buyers turned off on a home when it is painted in dark colors. Look beyond all of that. When numerous cosmetic updates are needed in a home, it can be difficult to see a home’s true value. Can you make it your own at a reasonable cost to you? Include that cost in when comparing it to other homes. Sometimes homes that need cosmetic updates are over looked by other buyers making it a bargain for you. Some times, buyers let the condition of a home disproportionately affect their valuation of it. We often see buyers choose a home in excellent move in condition over a home that, with some minor cosmetic updates, would be much more valuable for the money. Sometime home buyers over pay for that excellent home. Don’t be upside down if you can avoid it. Be a smart home buyer.
- Ignoring your agent’s advice
Most agents are not going to steer you wrong, or give you bad advice on purpose. Their advice comes from past transactions and what they know and have seen. Stress and confusion sometimes can come from buying a home when you do not know or understand that something may be a normal occurrence in the home buying process. Ask your agent what they think. For example you will always have something wrong with a home when you do a home inspection. You just have to figure out whether it is a deal killer, or whether it can be corrected, or whether is a minor issue. It is the same way with mold. Mold has become more common in the attic. To some home buyers it scares them to death. If you read about it you will learn that it is easily re mediated. Yes if you have major allergies you should move on to a different house, but in many cases it is not a reason to bail if the seller is going to have it re mediated by a professional.
We sometimes see a buyer that says every house is poorly built or every house is over priced. If you go in with a mind set like that then you are going to have issues buying a home. I have met buyers like that and seen them still looking a couple of years later and on their 3rd or 4th agent. A good agent will guide you and will answer your questions honestly.
I hope these 5 costly mistakes home buyers make is something you will not do now. Good luck on finding your new home and if you need a good agent in your corner give me a call or text at (248) 310-6239
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