Home prices are soaring in many cities around the US, with many selling for more than using price. The Denver real estate market is highly competitive right now. For a first-time home buyer, the competition can be a bit scary if you’re not prepared. However, there’s no reason that you should make things harder for yourself my making easily avoidable mistakes. With a bit of extra preparation and a thorough understanding of when to make a move, you could easily be sitting in the home of your dreams in no time. The home buying process can sometimes feel overwhelming. Luckily, with a bit of guidance, you can avoid making one or more common mistakes during the process.
TOP 7 MISTAKES TO AVOID WHEN BUYING A HOME
1. Don’t Get Too Emotionally Attached
Chances are that buying a piece of real estate is the most expensive purchase that you’ll ever make, so it is important to do your best to keep a level head when you buy a house. Experienced real estate brokers suggest that a potential buyer should always do their best to relax during the process and try not to get too attached. If you lose a house, remember that there will always be another one available. A great way to avoid getting your hopes up and becoming too attached to a specific property is to ensure that you are looking at several homes that you love so that you don’t become too emotionally invested in “the one.”
2. Taking the DIY Approach
In the age of the Internet, it may sound like a good idea to skip working with an experienced Denver real estate agent when searching for your new home. However, relying on your brilliant research skills alone isn’t the best way to go. In fact, with the help of the experts at Rhoads Real Estate, you can let our agents vet homes for you. In some cases, your agent may even be able to find properties that aren’t on the market just yet. And for those homes that are on the market? A good real estate agent will be able to gather all kinds of important information that can’t be found with a simple online search.
3.Not Checking Your Credit Score
Did you know that around 42 million credit reports currently contain errors? While some of these errors are inconsequential like a spelling error or an incorrect street address, others can greatly affect your credit score and make it harder to get approved for a mortgage. As a good rule of thumb, you should check your credit score at least 3 months before you start house hunting, giving yourself time to correct any errors.
4. Assuming You Won’t Get Pre-Approved
In a perfect world, every potential home buyer would have very little debt, a great credit score and at least a 20 percent down payment as they begin looking at real estate. But if you don’t fit all of that criteria there is no need to panic. In fact, it is totally possible for borrowers with less than perfect financial outlooks to get a loan in today’s market. With options like Federal Housing Authority loans, many types of home buyers can easily get pre-approved.
5. Not Getting Pre-Approved
Getting approved for a mortgage early on in the home buying process means that you’ll be able to enjoy a realistic understanding of just home much you can spend. It also shows sellers that you’re serious about making an offer. Additionally, pre-approval will work to give you a slight leg up when you’re competing with all-cash buyers. Make the home buying process less stressful by preparing all of the relevant documents like your bank statements, pay stubs, and tax returns well beforehand.
6. Not Saving Enough
Saving up for a down payment is an important step in buying the home of your dreams. However, your down payment is just the tip of the iceberg. Real estate experts agree that buyers should also have at least 2 or 3 months worth of mortgage payments saved up as well. Next, you’ll need to consider closing costs -which range anywhere from 2 to 5 percent of the home’s price- and property taxes. Once you’ve moved in, you’ll also need to cover the costs of household essentials, so at least 3 to 6 months of expenses should be put away.
7. Waiving Contingencies Before Understanding the Risks
Because the Denver real estate market is highly competitive, many home buyers are making offers that aren’t contingent on inspection or financing. While this is a good tactic for making your bid look more desirable to sellers, it can make the entire transaction much riskier on your end. Before making a potentially risky move like opting out of contingencies, be sure to speak with your realtor and attorney. Remember that all homes need an inspection, even brand new builds, and don’t be shy to ask sellers to fix issues before making an offer.
FIND THE HOME YOU WANT AT A PRICE THAT WORKS FOR YOU
With the real estate market hitting new highs, it’s easy for buyers to get overwhelmed or wrapped up in a specific piece of property. But with a bit of guidance, buying a home doesn’t have to be a stressful experience. If you’re looking to buy a house in the greater Denver area but are unsure where to start, the team at Rhoads would be happy to give you a few tips. So give us a call for a quick chat and we’ll get to work!
RREDenver.com | Chris@RREDenver.com | 720.261.7425