How to Avoid the Most Common Mistakes When Buying or Selling a Home
Buying or selling a home will likely be one of the greatest financial decisions most people will make in their lifetime. Oftentimes this decision can be made from a place of feelings and emotion rather than logic and wisdom. For many military families, these decisions are compounded by difficult challenges like unfamiliar markets, doing business remotely, and the additional stresses of a PCS move. By following some important guidelines, you are sure to be better informed when buying or selling your home property.
One of the biggest mistakes that potential buyers make is not having a clear grasp of their own personal finances and the costs associated with a home purchase. It’s very important to seek a mortgage approval prior to shopping for a home; having a clear picture of how much house you can afford can save a lot of heartache in the long run especially when you may be inclined to buy more home than you can afford. Speaking of shopping, the house isn’t the only thing you should be shopping around for. Think about educating yourself on various loan product options (traditional loan, FHA, FDA, VA), mortgage companies, and real estate professionals.
Another mistake some people make deals with adequately investigating the neighborhood where you are planning to buy. An important consideration to make is the average resale value of homes in this particular zip code or neighborhood. Getting overly fixed on a particular house that may not reflect the overall value of homes surrounding it is essentially emotion-led buying. Be sure to research what the relative noise level is. Are there trains, busy roads, or an airport nearby? What is the access to the roads and thoroughfares around the house? Will there be ongoing construction surrounding you? What about updates and repairs to the specific house?
Buyers aren’t the only ones who need to pay attention when it comes to homeownership transactions. Sellers, too, have some common mistakes to avoid, and underestimating the costs to sell cost tops the list. According to Dave Ramsey, many sellers fail to account for agent commissions, closing costs, staging costs, home inspection costs, repairs, seller concessions, the cost of the next home, and moving expenses. While many assume the typical cost to sell is around 5-6% of the home sale price for realtor commissions, that number can actually soar to a total of 10% of the home sale price when all of the other costs are accounted for.
Another common mistake sellers make is overvaluing their home. Sentimentality, memories made in the home, or costly repairs or updates that were made to the home can often cause some to see their property as much more valuable than its actual monetary value. This blind spot can similarly lead to homeowners not adequately preparing their home for a quick sale. Try looking at curb appeal, need repairs, or updates objectively through the eyes of a buyer.
The greatest mistake that both buyers and sellers make is foregoing these transactional processes with a licensed real estate professional. By a strict code of ethics, realtors act on behalf of either the buyer or the seller they represent. Realtors have access to much more information via the Multiple Listing Service (MLS) when it comes to shopping or listing a home. Most also have greater networks of other real estate professionals in their immediate circles, a variety of niche service providers at the ready (professional stagers, photographers, the name or contact of a landscaper or repair person), and a social media presence that helps to get you into or out of a home quickly, painlessly, and with the right protections.