| If you're like most people, purchasing your | | | | (5) Not getting a rate lock in writing. When |
| home will be the biggest investment you'll | | | | a mortgage company tells you they have locked |
| ever make. It's very important to prepare as | | | | your rate, get a written statement detailing |
| best you can. I will outline the Top Ten | | | | the interest rate, the length of the rate |
| Mistakes Made By Home Buyers. By keeping them | | | | lock, and program details. |
| in mind, you'll help create a successful and | | | | |
| much more enjoyable experience. | | | | (6) Using a dual agent--i.e., an agent who |
| | | | represents the buyer and the seller in the |
| (1) Looking for a home without being | | | | same transaction. Buyers and sellers have |
| pre-approved. As a potential buyer competing | | | | opposing interests. Sellers want to receive |
| for a property, you'll have a better chance | | | | the highest price, buyers want to pay the |
| of getting your offer accepted by being as | | | | lowest price. In the standard real estate |
| prepared as possible. A complete stranger | | | | transaction, the seller pays the real estate |
| (buyer) is asking you (seller) to take your | | | | commission. When an agent represents both |
| property off the market for at least the next | | | | buyer and seller, the agent can tend to |
| two to three weeks while they apply for a | | | | negotiate more vigorously on behalf of the |
| loan. As the seller, lets consider the type | | | | seller. As a buyer, you're better off having |
| of buyer you'd prefer to deal with. Neither | | | | an agent representing you exclusively. |
| pre-qualified nor pre-approved, this buyer | | | | |
| provides no evidence that they can afford to | | | | (7) Buying a home without professional |
| purchase your property. Pre-qualified this | | | | inspections. Unless you're buying a new home |
| buyer has met with a mortgage broker (or | | | | with warranties on most equipment, it's |
| lender) and discussed their situation. The | | | | highly recommended that you get property, |
| buyer provided you with a letter from the | | | | roof and termite inspections. Inspection |
| broker stating an opinion of what the buyer | | | | reports are great negotiating tools when |
| can afford. Pre-approved this buyer has | | | | asking the seller to make needed repairs. |
| provided a broker written evidence of income, | | | | |
| expenses, assets, liabilities and credit. As | | | | (8) Not shopping for home insurance until you |
| a result, much of the paperwork for this | | | | are ready to close. Start shopping for |
| buyer's loan has been completed. They provide | | | | insurance as soon as you have an accepted |
| you with a letter (pre-approval certificate) | | | | offer. Many buyers wait until the last minute |
| from the lender. You're as certain as | | | | to get insurance and do not have time to shop |
| possible that this buyer can close. As a | | | | around. |
| potential buyer, you can see that being | | | | |
| pre-approved will give you the best chance of | | | | (9) Signing documents without reading them. |
| getting your offer accepted. | | | | Whenever possible, review in advance the |
| | | | documents you'll be signing. It's unlikely |
| (2) Making verbal agreements. If you're asked | | | | that you'll have sufficient time to read all |
| to sign a document containing instructions | | | | the documents during the closing appointment. |
| contrary to your verbal agreements--don't! | | | | |
| For example, the seller verbally agrees to | | | | (10) Not allowing for delays in the |
| include the washing machine in the sale, but | | | | transaction. In a perfect world, all real |
| the written purchase contract excludes it. Do | | | | estate transactions close on time. In the |
| not expect oral agreements to be enforceable. | | | | world we live in, transactions are often |
| | | | delayed a week or more. Suppose you asked |
| (3) Choosing a lender just because they have | | | | your landlord to terminate your lease the day |
| the lowest rate. While the interest rate is | | | | your purchase transaction was scheduled to |
| important, consider the total cost of your | | | | close. A day or two before your scheduled |
| loan including the APR , loan fees, discount | | | | closing date, you discover your transaction |
| and origination points. | | | | is delayed a week. In a perfect world, no one |
| | | | is inconvenienced and your landlord is |
| (4) Not receiving a Good Faith Estimate. | | | | willing to work with you. More likely, |
| Within three business days after the broker | | | | however, your landlord is inconvenienced and |
| or lender receives your loan application, you | | | | angry. Terminate your lease one week after |
| must receive a written statement of fees | | | | your real estate transaction is scheduled to |
| associated with the transaction. This is both | | | | close. That way, if there is a delay in |
| the law and the best way to determine what | | | | closing your transaction, you have some |
| you'll pay for your loan. | | | | leeway. This approach might cost a little |
| | | | more, then again, it might not. |