Bidding on a Home: The only thing worse than not getting the home you wanted is not getting it because of an avoidable mistake. While working with a real estate agent certainly helps — and we recommend it — buying decisions are ultimately in your hands, so you want to be as prepared as possible.
Do you know someone else that is considering buying a home, too? Send this article to them! They’ll be thankful for the helpful advice and happy that you thought of them.
TOP 10 MISTAKES WHEN HOME SHOPPING
Not Being Ready To Make An Offer
Looking at properties without a pre-approval letter is like leading a toddler to a candy store knowing you forgot your wallet at home. You won’t like the result. A pre-approval letter is as good as money in the back when home shopping. It communicates to the seller that not only do you love the property but that you’re serious about purchasing it.
True, sellers may want to collect a few offers first, but many are just as eager to sell their property as you are to buy it. Giving a fair and attractive offer fast may be just the thing that will get you into your dream home.
Getting pre-approved is much easier and faster than it was a few years ago too! You can get started right now using our online application. It’s secure, convenient, and the quickest way to know how much you qualify for.
Hesitating Too Long Before Making An Offer
Of course, you’re allowed to hesitate. It ‘s a big financial decision, and emotions can run high. But don’t let uncertainty slow you down too much.
When it comes to real estate purchases, time can stifle and even kill the deal. You see, the longer you wait, the more competitors you’ll find. And a bidding war means you’ll ending pay more or even get outbid, missing out on the property altogether.
This is also where being prepared with your approval letter comes in. If you’re hesitating because you still need to apply for the loan, there’s a high possibility that you’ll miss out on that property.
Going All-In On Your First Bid
The next mistake is to put all your chips on the table –meaning offering your max pre-approved amount on the first round. What you want to do instead is look for homes that are below your maximum approved. That way, you have some wiggle room for bidding a bit higher on the second round (while others will be unable to because they didn’t read this article and bid max on their first round).
These trick also helps when going against all-cash offers, too. All-cash have a reputation of being tough to outbid because they’re attractive to sellers. But if they’ve gone all-in on their first bid, your higher loan-backed bid can take them out of the competition.
Going In Too Low
On the same note, you don’t lowball either. Sometimes home shoppers make an offer to negotiate, and it backfires. Remember that your goal is to buy the home, not get into a negotiation.
Instead, your first offer should be one that is fair for the house and the market while remaining under your max bid amount. Your real estate agent can help you with this one but do your homework as well. Research similar homes in the area to see how much they sold for and how long they were on the market. Compare the features as well as the square footage as it also affects what a fair offer would be.
Passing on The Inspection Contingency
Perhaps they didn’t want to ruffle the seller’s feathers, or maybe they thought that new constructions wouldn’t have flaws. Whatever the reason may be, we’ve seen too many homebuyers make the mistake of declining the home inspection contingency.
A home inspection contingency gives you peace of mind. It uncovers potential flaws that may require major cash to fix. If the damage is severe enough, it could offer a way to legally back out of the deal.
Whether it’s a new home or a jewel from the 1950s, always get a home inspection before bidding on a Home.
Bidding on a Home: Letting Too Many People Have a Say
This mistake is tied to the second one we mentioned about hesitating. Letting people who are not financially invested in the purchase could slow you down or make you second guess your first thoughts. Yes, having advice from your mother or a friend is valuable, but their helpfulness may be too protective. If your “advisor” is the type to focus on flaws or tell you “shop around” when they think you’ve fallen in love too fast, it might be better to shop without them.
Funding your dream home is what we do, and we’re the best at it! Contact us today to work with a mortgage professional that cares about Bidding on a Home goals as much as you do.