Purchasing a home—whether you're a first-time buyer or a repeat buyer—is always a complicated ordeal. Even if you've done all your homework on the purchasing process, there are still a few situations where you can make mistakes. Thankfully, there are realtors who have gone through the process dozens of times before and can see a bad decision from a mile away. Here, the three most common mistakes real estate agents see their clients making.
1. Not knowing your actual budget
Sure, it's fun to go to open houses—but you should really know how much you can afford before you even start browsing. In fact, this is by far the most common mistake Eileen Oldroyd of Oldroyd Realty in Orange County, California, sees: "I've shown clients houses in their perceived price range only to find out that they should be looking in neighborhoods that are hundreds of thousands lower," she said. "It's heartbreaking to see buyers tour a home, fall in love and then find out they don't qualify for the loan."
So before you look at homes or listings you may get attached to, make sure you've sorted out your financing. This starts with putting your existing house on the market, or at least have it staged and ready to be listed. Also, if you need one, make sure you're pre-approved for a bridge loan (a loan that helps you with the down payment for the new home when your financing is tied up in your existing home). First-time homebuyer? Make sure you've been pre-approved for a mortgage.
Sorting this out before you start looking actually makes you a more competitive buyer, too, says Kim Powers of @properties in Chicago. "If you find something on a Friday, you have to be ready to move on an offer on Saturday because the good stuff is not going to be around for very long," she says.
2. Not focusing on what you actually need
Brenda Bradshaw of The Cleary Group in Bradenton, Florida says that she sees buyers focus on flashy upgrades like new appliances and multi-room audio systems. But while those things can be added to nearly every home, some things like location, bones of the house, layout for the family and the foundation cannot. Think about how the home will assist your day-to-day life—and budget—and not the life you're aspiring to live. "Make a list of items that are important beforehand," Bradshaw says, "Be sure the home itself checks off as many boxes as possible." Buying with a partner? Make sure you've talked about what you both are looking for and why you're looking for it, and rely on each other to help you stay on track.
Size, too, can distract buyers from what really matters. Dream of having a house that is big enough to host all of your visiting family and friends? That's a nice thought, but it doesn't mean you should buy a house bigger than your day-to-day needs. "It should really be about the people buying the house," says Missy Cleary of The Cleary Group in Sarasota, Florida. "When there are too many people being factored into the decision, that's when people make mistakes." So while you may want to have two to three guest rooms for your nieces, nephews and in-laws, you should settle for one, at most. Cleary says that when people buy bigger houses, they're ultimately unhappy because half of it is always empty. "The chances of everyone coming at the same time is very minimal," she says.
3. Not working with a qualified team
While you may want to give your family friend the business (or get a discount), letting them be your real estate broker, lawyer or inspector may not be the best decision for yourself. While they could be great at what they do, they also could not be as entrenched or as experienced in the market you're looking in, which can tack on additional, otherwise avoidable expenses, says Jessica Cohen of Douglas Elliman in New York City.
How do you find the right person? Research, of course. Cohen recommends interviewing your potential team and asking what they've sold, how many transactions they do a year, how many years experience they have in the local market and how much time they commit to their job.
"In the long run, buyers will save money, time and pain by hiring the right person, not the cheap person," Mike Burns of RE/MAX Professionals in Denver, Colorado reiterates.