Homebuyers: Five Mistakes that Could Cost You (Part 2)
Welcome back! This is continued from yesterday’s post of the biggest mistakes homebuyers make that could end up costing them money, time and unmentionable amounts of heartache.
3. Not Getting all Inspections
Most often I notice that when investors are buying the property and it is bank-owned and the purchase price is paid all in cash that many recommended inspections are waived. This could be because some investors don’t live in the area and decide it will take them a while to close escrow if they also decide to throw inspections into the mix and besides inspections are only there to protect the lender, right? Because the bank has not seen the home and the only way it can judge if the home will appreciate or hold value in case of foreclosure is by enforcing the need for inspections. What do banks know anyway?
Think again. Sometimes it helps to see a home like an overcautious bank, not an excited homebuyer. Not the banks that decided to lend to anyone willy-nilly regardless of their credit history, but a sane, extra-cautious bank.
Brokers usually have a form we have homebuyers sign if they decide to waive any inspections. Amongst recommended inspections are termite / wood destroying pest inspections, roof inspections, septic inspections and a whole house inspections. In spite of all these inspections, some things can fall through the cracks. So it is a good idea to get all inspections done as early as possible in escrow. Remember that there is always a built in inspection contingency in your residential purchase agreement or offer. The default time you have to clear this contingency is 17 days, but the bank can decide to reduce this to 10 days. Get your inspections done early and you won’t regret it. If there are flaws in the home, you can always cancel escrow and get your deposit back. So much better than being stuck with a home with unknown flaws!
4. Not Knowing the Neighborhood
Most homebuyers look for homes in known areas. Either they have rented a house or an apartment in this certain neighborhood, or they have friends and / or relatives who live there or they work close to the neighborhood. In some way they have driven through the streets or walked in the area. This is usually a good idea. It is very difficult to get a feel for a strange place you have never been to just by looking at a few homes within that area. While you might be an expert at such a thing, it is nevertheless a good idea to stick to areas you know.
But what about relocation buyers? For such buyers, unfortunately, research is all they can depend on. However, even for these, it is not a bad idea to ask around amongst their friends or even just online. In my experience, advice given online has to be taken with a pinch of salt because some people can be pretty rude and obnoxious while others can be pretty honest. So take from it what you must!
5. Being Indecisive
Besides being difficult to deal with and avoided by Realtors, indecisive home buyers can be a hazard to themselves as well, and not just because they can pass up on good homes that they would otherwise buy because they are indecisive. Indecisive doesn’t mean that they don’t jump on what they are told is a “good deal,” I use “indecisive” in the larger sense here meaning they don’t really know what they want. As such, they wait and wait and wait to buy a home and then either don’t buy at all or pounce on the wrong home and realize they paid too much too late.
It’s always a good idea as a homebuyer to get a good idea of what you want in a home. And “I’ll know it when I see it” isn’t good enough. I have heard from a lot of people that when they tell their Realtor what they’re looking for, they still get shown the wrong homes. While this might be the case as well, I think there are also a lot of homebuyers out there that don’t know what in the world they want in a home. Why not make a list? You can always check it against reality and change it, but it might give both you and your Realtor a good idea!
Happy home shopping!
