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Common Mistakes Home Buyers Make

Common Mistakes Home Buyers Make

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Polly Wooldridge

Polly Wooldridge, president of the Lynchburg Association of Realtors

It is exciting to buy a home, especially your first one.

It is easy to be dazzled by granite, hardwood floors, stainless appliances, and beautiful landscaping. Beware of rationalizing a larger purchase than you planned because, “this house is so perfect that it’s worth $30,000 more,” or “we can spend extra on this house because it doesn’t need anything.”

» Overspending: Before you start looking at homes, set your budget. You can check what a monthly payment may be online but, remember, online tools are only estimates. How does it compare with your current payment? The payment you can afford now is a strong indicator of what you can afford for your new home.

» Being realistic: When calculating your future mortgage and comparing it to your current rent payment, do not get ahead of yourself. If you are in medical school and plan to increase your income substantially, do not commit to a future income that you don’t have yet. No one can predict the future. Even if you are sure about an upcoming promotion, there are no guarantees.

» Considering the costs: When you purchase a home there are additional costs besides the monthly rent payment you are accustomed to. You will need to include insurance, homeowner’s dues and maintenance. In addition to the deposit required when you agreed on the contract for your new home, there are closing costs and down payment. Don’t forget mortgage insurance, if your loan requires it. There will be the costs of moving such as supplies, truck rental and deposits.

» Failing to add contingencies: A home inspection may protect you from future repairs you are unaware of, or at least make you aware of those upcoming expenses. The inspector will find problems. The contract should be contingent on a satisfactory home inspection. Another contingency is getting your loan. In addition, it is wise to make the contract contingent on the home appraising for the price you agree to pay. A good real estate agent will protect your interests by adding contingencies in the contract. Be sure to ask!

» Offering too low: Some buyers are overconfident. They think they can buy their dream house at a fraction of its actual value. Do not start your negotiations too low. You can offend the sellers and make the entire transaction difficult and tense all the way through to closing. You may need that seller to allow you possession prior to closing, or the seller may choose to leave you furnishings or equipment, such as a much-needed lawnmower. If you have not gotten off to a difficult start, they are more apt to work with you. In today’s market, your offer is not likely to be considered if you offer a low price or add too many contingencies. This is when you need your Realtor’s advice!

» Not being represented: You should find a real estate agent you trust and let them do their job. Realtors abide by a code of ethics and number one is “to protect and promote the interests of their client.” Choose an agent who has experience, has earned designations, and has won awards, or is young, eager and sharp. In most cases, the seller already has promised to pay the buyer’s agent as a part of their listing agreement, so if you do not use a buyer’s agent to represent you, the seller’s agent will keep that part of the commission and you are on your own.

Polly Wooldridge is the 2021 president of the Lynchburg Association of Realtors and a Realtor at John Stewart Walker.

Polly Wooldridge is the 2021 president of the Lynchburg Association of Realtors and a Realtor at John Stewart Walker.

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