Hi, I’m Warren Oberholser. I’m a realtor in the East Bay Tri-Valley area in Northern California. My goal is to help both buyers and sellers get maximum results for one of their biggest investments, their home.
Whether you’re Bill Gates or Warren Buffet, your home purchase may be one of your biggest investments you make in your entire life. Scary thought, isn’t it? Not if you approach this investment as two of the wealthiest Americans would. Buying a home, especially in the Tri-Valley area is a business decision. So to avoid costly mistakes, it needs to be addressed as one. This means performing careful research, absorbing knowledge, and keeping your emotions at bay. Let’s look at the five most common mistakes home buyers tend to make.
Buyer Trap Number One: Not getting your finances in order
If you plan to finance your home, loan approval is one of the most important steps to take and it’s one of your first ones you should perform. It should be the first step you take, as well and for several reasons. First, the mortgage preapproval process lets you know how much you can realistically and comfortably pay for a home. Just as you wouldn’t go car shopping without a clue of how much you could spend, don’t look at one house until you know your limit. Additionally, in this fast moving sellers market, most homeowners don’t even want a non pre-approved home buyer to even look at their home.
Given this information, it’s not a stretch to understand they most likely won’t entertain an offer until somebody is pre-approved. Without the preapproval letter, you may just lose the home of your dreams to another buyer who is pre-approved. The pre-approval process is painless and not overly involved. It’s free to do, so there’s no reason not to make your first home buying step one that leads you over the doorstep of the mortgage broker or bank.
Buyer Trap Number Two: Not understanding the loan process
It’s so important that you ask your loan agent, any fees or costs you don’t understand. This way at the time of closing there’s no surprises. If a fee or charge does sneak up on the closing documents, you’ll notice it and take action. Standard fees include document preparation fees, underwriting fees, loan distribution charges, and others.
By law, the lender is required to provide to you a form called the “Loan Estimate”. This form or document will include a list of all fees in advance of closing. Never hesitate to ask if you don’t understand anything on the form and don’t assume that there won’t be any additional fees at closing.
Then at closing, you’ll receive a“Closing Disclosure” form, which is referred to as the CD. It’s important that you compare the CD to the original loan estimate. If you find something that’s new on the CD, then you should bring this up to your loan agent immediately.
Buyer Trap Number Three: Not performing your due diligence
While the seller has a duty to answer all seller disclosures, which is the TDS and SBQ and to answer any buyer questions, you have a duty to protect yourself by performing various inspections before you fully commit to purchasing the home. If warranted, you should also order a roof and termite inspection, as well as any inspection that may be specific to this property such as foundation, drainage and lateral sewer inspection.
Even if you decide you want to purchase this home, no matter what, it’s much better to know these problems upfront so you now have options to negotiate with the seller for repairs and or a possible price reduction.
Buyer Trap Number Four: Judging a book by its cover
It’s easy to fall in love with the decor. This is why home developers have model homes. These homes are carefully staged to appeal to the consumer’s emotions. By the same token, it’s easy to dislike a house because it’s messy, dirty, or has dated furnishings and features. It’s so important to remove your preconceived notions of what the perfect house will look like. Only then you can truly see a home for what it offers, both good and bad. Don’t allow the dazzling decor to make you forget what you want in a home. Also don’t dismiss a home if it needs simple updating. Carpet can be replaced and walls can easily be painted. Focus on the layout of the house, not the cosmetics.
Buyer Trap Number Five: Not considering additional expenses.
When you’re pre-approved for a loan it’s tempting to buy at the top of your limit. Don’t give into temptation. When you purchase a home, you take on expenses you didn’t have when you rented a home. If the home is in a managed community, you’ll most likely have monthly homeowner association dues. These are referred to as HOAs, If the home has a pool, you’ll pay for maintaining it. Many renters don’t pay for water, but homeowners typically do. The ongoing maintenance of a home falls on the homeowner’s shoulders, so it’s important to leave enough room in your housing budget to take care of them.
One way to do this is to request from the seller, a copy of the utility bills for the past few months or year. This way, you’ll have an idea of what to expect when you own the home. I hope this video better helps you navigate through your home buying process.
I hope you enjoyed this article. Please let me know if you have any questions. Warren
Hello…I work with both buyers and sellers in the Tri-Valley area of Northern California. The Tri-Valley is comprised of 6 cities: Pleasanton, Livermore, Dublin, San Ramon, Danville, and Alamo. To better understand what each city has to offer, I have created a Pros and Cons video and BLOG for each – (Pros & Cons for Pleasanton, Pros & Cons for Livermore, Pros & Cons for Dublin, Pros & Cons for San Ramon, Pros & Cons for Danville and Pros & Cons for Alamo). If you are thinking about purchasing or selling a home, please reach out to me by text, phone, or email. If it is convenient, I can schedule a Zoom chat so we can discuss your home goals. Wishing you all the best on your home journey. Cheers!
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