Buying a home can be a confusing process for somebody who has not been through it several times. There are so many things to consider and so much paperwork to be completed before a transaction can be fully completed. If a buyer is not prepared for all the eventualities, it can be a very trying experience. In order to make the process as smooth as possible, I am going to list five major mistakes that many buyers make.
1. Not being pre-approved. In my mind, this is the biggest mistake a buyer can make. Most sellers will not consider an offer unless the person making it is pre-approved. A seller needs to know for sure that a buyer has the ability to actually purchase the home before they will take it off the market and go through all the difficulties that come along with the home buying process. As a matter of fact, if a house is a bank owned property, you cannot even submit an offer without a pre-approval. Even more important, a pre-approval letter allows a buyer to know exactly how much they can spend, how much they need to put down, as well as what sort of lending programs they are eligible for. If you have not taken the time to speak to a lender and get everything together, you are not ready to buy a house. It only takes a short amount of time to get pre-approved and it makes all the difference.
2. Not being flexible. All buyers have certain parameters in mind when they set out to buy a house. Most items are fairly easy to accommodate. Things like square footage, number of bedrooms and a garage are items you can probably stay firm on and still have a reasonable chance of finding something very close to what you are looking for. It is the little things that you have to be prepared to have an open mind about. A good example of this is location. Many buyers who come up here are not that familiar with all the different neighborhoods and areas. They will tell me that they have to be in Big Bear Lake East, but they have never seen Moonridge or Fawnskin. Many times, when I show them the different areas, they will change their minds and find the perfect house for them in a different location. Things like paint, carpet, or landscaping should never cause you to dismiss a home out of hand. Many of these issues are easily remedied and a beautiful home may lurk just below the surface. If you look at things objectively and stay flexible you have a very good chance of scoring a great buy.
3. Not using a local Realtor. Just because a Realtor is legally allowed to sell property in an area, doesn’t mean they should. For a Realtor to competently serve all the needs of their clients, they need to be an expert in the area they are selling in. This does not mean looking at the internet for a few days and thinking they are an overnight expert. To truly know a market takes years. It is not something you can bone up on. You need to know all the actives, pending, contingent and sold listings. Not only that, you need to know why a certain property did not sell or why it went for a certain amount as opposed to the one next door. You need to know the character of the neighborhood and what the property values are. Is it a noisy street? What are the schools like? What percentage of the homes are rental properties? Is anybody allowed to use the lake? What area is best for full time living as opposed to weekend use? The list goes on and on. One thing I can guarantee, if you are not using a local expert, you are not being properly represented.
4. Not making a strong offer. This is the number one reason for buyers to lose out on a house. The market is heating up here in Big Bear and good deals are not staying on the market for long. We have been conditioned for so long to believe that the buyer is in the driver’s seat that it is hard to adjust to the new market conditions. If you come in more than 10% low on a good property, you are making a big mistake. The first impression is the most important impression and by making an offer that has no chance of being accepted, you have branded yourself as someone who is not a serious buyer. If it looks like there are going to be multiple offers on the property, you need to come in at full price or not at all. I often ask my clients “Do you want to buy this house or just make an offer on it?” If they want to buy the house, then I tell them they need to get serious about doing so. In many cases, the well priced listings are going for around 10% over the list price. If you are not prepared to go 10% over list, you are not going to be successful in your bid to acquire the property.
5. Not acting quickly. This goes back directly to mistake number one. If you are not pre-approved, you cannot act in a timely manner when it is needed. Homes that are priced very well are lasting less than a week in our market. Buyers are swarming all over them and they are going fast. If you are a motivated buyer, you need the ability to make an offer on a house and snatch it up before anyone else. This may mean you need to be ready to drive up here with just a little notice, bringing your pre-approval letter and your check book with you. You have heard the saying “The early bird get’s the worm.” It applies very well to this situation.
I hope this post was helpful and will make it easier for you when you are ready to buy your next home. It really just boils down to universal principles of doing your homework, acting wisely and being prepared. If you have any questions or would like to schedule an appointment to look at property, please do not hesitate to contact me at your leisure.