The 6 most common and costly home buyer traps, how to
identify them, and what you can do to avoid them.
1. Bidding Blind - What price
should you offer when you bid on a home? Is the seller’s
asking price too high, or does it represent a great deal?
If you fail to research the market in order to understand
what comparable Utah County homes are selling for, making
your offer would be like bidding blind. Without this
knowledge of market value, you could easily bid too much or
fail to make a competitive offer.
2. Buying the Wrong Home -
What are you looking for in a home? A simple enough
question, but the answer can be quite complex. More often
than not buyers have been swept up in the emotion and
excitement of the buying process only to find themselves the
owner of a Utah home that is either too big or too small.
Maybe they’re stuck with a longer than desired commute to
work or a dozen more fix-ups than they really want to deal
with now that the excitement has died down. Take the time
upfront to clearly define your wants and needs. Put it in
writing and then use it as a yard stick with which to
measure every home you look at.
3. Undisclosed Fix-ups -
Don’t expect every seller to own up to every physical detail
that will need to be attended to. Both you and the seller
are out to maximize your investment. Ensure that you
conduct a thorough inspection of the home early in the
process. Consider hiring an independent inspector to
objectively view the home inside and out, and make the final
contract contingent upon this inspector’s report. The
inspector should be able to give you a report of any item
that needs to be fixed with an associated, approximate cost.
4. Not Getting Mortgage Pre-approval
- Pre-approval is fast, easy and free. When you have
a pre-approved mortgage, you can shop for your Utah County
home with a greater sense of freedom and security, knowing
that the money will be there when you find the home of your
dreams.
5. Contract Misses - If a
seller fails to comply to the letter of the contract by
neglecting to attend to some repair issues, or changing the
spirit of the agreement in some way, this could delay the
final closing and settlement. Agree ahead of time on a
dollar amount for an escrow fund to cover items that the
seller fails to follow through on. Prepare a list of agreed
issues, walk through them, and then check them off one by
one.
6. Unknown Closing Costs and Rushing
the Escrow Close - Make sure you identify and uncover
all costs - large and small - far enough ahead of time.
When a real estate transaction closes, you will sometimes
find fees for this or that sneaking through after the
sub-total fees, such as loan disbursement charges or
underwriting fees. Understand these in advance by having
your lender project
total charges for you in writing.
Take your time during this critical part of the process, and
insist on seeing all paperwork the day before you sign.
Make sure this documentation perfectly reflects your
understanding of the transaction and that nothing has been
added or subtracted. Is the interest rate right? Is
everything covered? If you rush this process on the day of
closing, you may run into a last minute snag that you can’t
fix without compromising the terms of the deal, the
financing, or even the sale itself.