Ten Real Estate Mistakes, Part 1
Given that we’ll be moving in the coming months, I’m always on the lookout for good articles on buying and selling houses. Here’s one from Bankrate.com that covers ten real estate mistakes to avoid. Today we’ll cover the first five…
1. Not understanding the length of the buying/selling process – This is the scariest one for us… The home-selling process can often take a surprisingly long period of time. The article recommends giving yourself and extra couple of months. But we don’t have an extra couple of months!
2. Exposing your hand – Never let your love of a house cloud your judgment, and always contain your enthusiasm. You don’t want to let the seller (or their agent) know that you’re hooked.
3. Skipping the loan preapproval step – Preapproval gives you an idea of how much you’ll be able to borrow, and it shows the seller that you’re a serious buyer. And in a hot market, sellers will demand proof of preapproval before they’ll accept your bid. Otherwise they might be wasting their time.
4. Assuming the appraisal equals actual value – Appraisals should be an objective estimate of your home’s value, but it’s critical that your agent do a comparative market analysis to get a reliable estimate of your home’s value just to be sure. And if you’re buying, be sure you get similar “comps” from your agent before making an offer.
5. Timing the bubble “burst” – Throughout most of the country, the real estate bubble remains ‘intact’. And bubbles such as these usually don’t burst, they slowly deflate. Your best bet is to treat real estate as a long-term investment, rather than a way to make a quick buck.
See also: Ten Real Estate Mistakes, Part 2
[Source: Bankrate.com]
Published on March 21st, 2006 - 4 Comments
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I’ve been reading David Bach’s Automatic Millionaire Homeowner that FMF has been giving away like crazy, and it definitely helped reverse my decision to wait for that “bubble” to burst. While prices in my area seem to be going down a tad, according to Bach, not once in the last 50 years has the average home price been down for the year. And with all the people being born and entering the country through other means, I’m starting to see the light that is home ownership.
Good luck in your search for the perfect home. I look forward to reading more about your journey so that mine won’t be so difficult!
Comment by Nick — Mar 21st 2006 @ 1:16 pmRe. David Bach, I don’t have the book handy but I think he says the national market has always been going up– but local markets can go down for several years at a time, and Bach does stress that you should worry more about your local market, as that is where trends will most directly affect you. But still, as long as you’re planning to own the home longer term, you’ll always come out ahead by owning, regardless of the state of the market when you buy.
Comment by Madame X — Mar 21st 2006 @ 4:01 pmMy experience buying four houses and selling three is that the length of the process is usually overstated, especially if you are focused on making it go quickly.
My last two houses listed, sold and closed within two weeks. That may be atypical, but it can be done.
Also, every house I’ve ever purchased I’ve negotiated an “early move-in” deal, where I get to move in before closing. That makes the deal *seem* much faster. It means I can just move my stuff house-to-house and only impose on friends once. I’m a bit mystified that more people don’t know about that, or think it is odd. You simply pay the pro-rata of the mortgage as rent per day early you move in. It is basically free money for the sellers, and they usually leap at the chance.
Comment by Bruce — Mar 28th 2006 @ 10:46 amBruce: We’re actually hoping to do the opposite… Sell and close on our house, but negotiate to rent back from the new owners for a little while. That way we’ll have the money in our pocket, and will be in a better position when it comes to buying our new house — no contingencies based on sale of our house, no funny business relating to bridge loans, etc.