Buying a home is stressful, and it can cause lots of anxiety for buyers (and for their agent). Sometimes that stress and anxiety can cloud buyers’ judgement. And when buyers take matters into their own hands, it can result in expensive mistakes.
Here are the top five that I’ve seen. Warn your clients about them before they misstep.
1. Working with multiple agents
Some buyers think if they work with multiple agents they’ll be able to cover more ground and find the perfect home faster. In reality, working with multiple agents can cause nothing but confusion and a waste of time. And in the end, they might miss out on the perfect property anyway.
When a buyer is committed to one agent they will be able to build a rapport.
The agent will gain a clearer understanding of what the buyer is looking for if they spend time together going through the criteria and working as a team. Not only will they be able to find them the perfect home, but the agent may also suggest a neighborhood the buyer wasn’t even considering.
2. Skipping the home inspection
Even though for most people buying a home is the biggest financial investment they’ll ever make, many still treat the investment in a cavalier fashion.
Buyers sometimes cut corners. They might think they’re saving money, but they won’t know what they’re really buying if they don’t get an inspection.
At the same time, not all home inspectors will inspect a home from top to bottom, inside and out. Sometimes another inspector needs to be hired to check for specific conditions, such as for mold, or specific areas, such the swimming pool or the septic tank.
This is one of the many reasons a buyer should have a list of things that need to be inspected to ensure they actually are.
3. Using an out-of-area lender
Finding a top lender is just as important as finding a top agent: Both need to be an experts in their industry and area.
Therefore, searching for the best lender nationwide isn’t always the right move. A local lender knows the customary fees for the area, which will be included in their good-faith estimate.
A lender in another state may or may not know or include this information. With a local lender, a buyer can walk into their office at any time if they have any questions or concerns.
4. Buying the cheapest homeowner’s insurance
For some buyers, purchasing homeowner’s insurance is a formality. In their mind, it’s all the same, so they go with the cheapest policy. Well, not all insurance carriers are created equal, nor is the coverage.
If buyers don’t do their homework and investigate potential insurance carriers before signing on the dotted line, they could be left empty-handed when it comes time to file a claim.
Insurance carriers can, and do, go out of business — especially when a natural disaster hits. Investigating a carrier isn’t that difficult and won’t take a lot of time.
Buyers can visit the Better Business Bureau along with insurance forums to get more information. Finding out their financial rating with the state, claims-paying practices and financial stability is also key.
5. Skipping the final walk-through
The whole purpose of the final walk-through is to make sure the property condition hasn’t changed, that everything included in the sale is still there and that everything that was supposed to be removed has been. Yet, some buyers skip the final walk-through altogether, or do it days before closing.
Once a buyer closes on the property, there is no going back. Not only should they do a final walk-through, they should do it on their way to closing.
Early in my career, a fellow agent told me about a buyer who did the final walk-through the day before closing. The house was completely empty. There were only a few boxes left in the garage, so they didn’t think anything of it. Well, after closing they were greeted with a damaged garage. Turns out the teenage son accidentally backed the truck into the garage to pick up the boxes, which left damage, and didn’t tell anyone.
To this very day, I advise my clients to do the final walk-through on the way to closing.
To avoid such mistakes, it’s imperative that a buyer has a good team in place when buying a home, including a top agent, lender and home inspector. By having top professionals working for them, they’ll be able to avoid the biggest mistakes that other buyers make daily.
Some mistakes are minor, but others come with costly consequences that can be avoided.