In real estate transactions, the stakes are high and even a small mistake can end up costing you thousands of dollars. Whether you’re looking to buy or sell, here are some common mistakes to watch out for.
Not Getting the Price Right
One of the toughest pieces of any real estate puzzle is setting the right price. If you price it too low, you potentially leave money on the table. Price it too high, and it will sit on the market for too long, causing buyers to will wait until you’re desperate and then make you a cut-rate offer. The mistake many sellers make is to simply look around at the price of other homes in the neighborhood without thinking carefully about whether those home are comparable. So if you’re in the market to sell, your first step should be to hire a home appraiser. It might cost a few hundred dollars, but it’s an expense that can save you thousands down the road.
Not Fixing It Up
While hurrying through the process of selling a home, many sellers fail to take care of all of the little things, like a door that’s coming off the hinges, an overgrown backyard, or a chipped and peeling paint job. While these problems might seem minor, they add up and can cause buyers to view your home more as a fixer-upper than a dream home. Before you put it on the market, spend a few weekends making sure your home is looking its best.
Hiding Problems From the Buyer
Some sellers think they can conveniently “forget” to disclose problems to a buyer. While a buyer might not discover the problems during the inspection or walk-through, they are bound to eventually. And if those problems are severe enough, you could be in for some costly litigation. Don’t try to pull a fast one on buyers. Make sure they are informed in writing about any issues so that there is no cause for dispute after the sale goes through.
Wrecking Your Credit At the Last Minute
The home-buying process can be long and drawn out, which provides ample time for buyers to make some big financial mistakes. Many buyers fail to realize that a pre-approval is not a guarantee that you will land a loan. If you do something to change your credit status during that time — such as buying a new car, or missing a few credit card payments — the pre-approval numbers you were quoted can disappear in an instant. The bank might stick you with a higher interest rate, or lower the total loan amount, jeopardizing your chances of landing your dream home.
Getting Into a Bidding War
During a heated bidding war, emotions run high, which can cost you dearly. If you have your heart set on a house and want to go above the asking price, make sure you have someone to do the negotiating for you. Many novice buyers, looking to save a few bucks, will venture into the housing market without a buyer’s agent at their side. But a good buyer’s agent will be an advocate on your behalf and will be a shrewd negotiator during the process.
Not Taking the Inspection Seriously
Most lenders will insist on a inspection before they sign off on the deal to ensure that the home isn’t about to collapse in on itself. Unfortunately, buyers often treat this as just another step in the process and fail to take advantage of the inspection. Follow along with the inspector and take detailed notes to get a sense of potential problems. Armed with information about a home’s faults, you can use the inspection as leverage to drive down the price.