If real estate transactions weren't fraught with out of control emotions before this, they certainly were from there on out.
Yet emotions running on high for elongated timeframes often leads to trouble. And when it comes to homebuyers (both of today and of yesteryear), there are five pitfalls that I have seen almost every buyer make all thanks to supercharged feelings. Out of all of these emotions, however, five are the most detrimental.
Always Looking for a "Better Deal"
I have seen many a buyer who believes that prices will continue to plummet, that rates haven't yet hit rock bottom and that the million dollar mansion on the hill is going to go on sale for $175,000 next Thursday. Yet, none of this ever really happens. The market continues to have vicissitudes, and beautiful, expensive homes never drop almost 100 percent in price overnight.
I've seen buyers lose out on six or seven homes before finally learning this lesson the hard way. Sadly, most of those buyers wound up having to settle for a house they liked, because they lost a dozen homes that they were in love with -- all because they waited too long.
Completely the opposite of buyers who wanted to search forever, were the buyers I worked with who would have happily bought the first house they laid eyes on. Rarely does a buyer look at only one house and say, "this is it, this is the one", and this is for good reason.
When this happened with my buyers, I had to put on the brakes and make them evaluate and look around a bit more. My advice? Look at a minimum of five houses before making a commitment to one. Deciding too soon can lead to all kinds of buyer's remorse later.
Believing All Short Sales and Foreclosures are "Deals"
Trust me when I say that not all short sales or foreclosures are steals. They might all be marketed that way, but most of them are usually teetering just below market value.
In these situations, the listing agent's goal is to entice buyers into a bidding war with a low starting price and getting them to go up from there. Oftentimes, this works like a charm, making buyers toss logic out the window. I have seen some ultra-competitive buyers overpay for a house, simply because they got locked into an auction mindset.
Rely on your agent, and trust his or her advice. Avoid the auction mindset.
Many homebuyers look at lowballing as a smart strategy; as vigorous negotiation. It isn't. In fact, just as you are emotional about buying a house, a seller is equally emotional about selling it. Low-ball offers can come off as insulting, and even worse, make it appear that you aren't serious about buying a house at all. Your agent will be able to provide you with a realistic estimate to use as an offer, don't go below that.
Not Trusting Your Agent
This is a big hurdle for many buyers. I realize that most real estate agents rank right up there with used car sales men and ambulance-chasing attorneys when it comes to public perception, but that doesn't mean they are all bad. As a buyer, you need to do your homework and hire a buyer's agent who is experienced and who comes highly recommended by people you trust. If you find a competent agent you can trust, everything else falls into place.
Buying a home elicits all kinds of crazy emotions, reactions and responses from all kinds of people. However, letting emotions run the show is no way to buy a house. Look at buying your house the same way in which you would approach a business transaction. The sooner you are able to separate yourself from the emotion and look toward the future resale potential of whatever home you buy, will be the cleanest path you can pave to closing and beyond.
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