You are super-duper excited because you and your family have made the decision to find a new place you can call home. Yay! But before you make your big purchase, make sure you do not make these 3, all too common, homebuyer mistakes.
Mistake #1: Searching for your dream home before applying for a mortgage pre-approval.
You just concluded the most successful showing of your life and you know that this home is the one for you. You tell me “David, I want to buy this home!” You’re envisioning sipping some margs on that beautiful stone patio with the girls and taking a dip into that heated in-ground pool after a long day at work.
However, your dreams come to a screeching halt as I inform you an offer can’t be made. “What? Why?” you ask nervously. “I need a pre-approval letter from your lender. Have you called them yet?” I ask, already knowing your depressing answer. Your shoulders slouch forward and you raise your hand smacking yourself in the head knowing that your agent has told you to get pre-approved at least a thousand times (And he’s been counting).
Because of your negligence, the dream home of a lifetime falls under contract with another Buyer that is pre-approved and you’re going to have to find another home. This is not a good position to be in and you’re going to let everyone down, especially yourself.
If you are not pre-approved by a reputable mortgage lender you are simply a window shopper and not a real Buyer. When it comes time to submit an offer you have no ammunition to pull the trigger on that deal. Even worse, many Sellers won’t even let you in their home unless you can furnish a pre-approval letter.
So please, before we go look at homes, call your mortgage lender and get pre-approved!
Mistake #2: Assuming you need a 20% down payment or that your credit is not good enough.
Homeownership is one of the most rewarding feelings someone can have, but all too often I see people get robbed of their own dreams by assuming they need 20% down or assuming their credit is not good enough. Never assume these things when purchasing a home because, well, we all know the expression when someone assumes.
To give you some encouragement, I often see people who highly doubt their abilities to purchase real estate pleasantly surprised after speaking with a lender. Make the call to a few reputable mortgage lenders and the worse you’re going to hear is “no.”
Mistake #3: Waiting for the Unicorn.
As a master dealmaker, I will be the first to tell you that no one, ever, gets 100% of what they want in a home or in life. Why? Because here on Earth nothing is perfect and by accepting that reality you’re going to make it a lot easier on yourself when looking for a home.
Unless you have deep pockets to build a custom-built new construction home, you are probably going to purchase a home that you made a compromise on. For example, you come across a beautiful ocean-front property that’s priced to move but the kitchen does not have the exact cabinetry that you want.
You don’t have to purchase this home, but you may say to yourself “Wow, I love this home, I’m really digging the price, but I don’t like that ugly yellow cabinetry in the kitchen. Because everything else is on point, let’s submit an offer David, and later down the road, I’ll replace those awful kitchen cabinets.”
Being able to accept that nothing is perfect allows your mind to open up and see what you can do after purchasing the home to make it fit you and your needs just right. This is called potential. By waiting for the Unicorn property you will most likely never find the home you are looking for, many good homes will pass you by, and you’re going to end up tiring out and settling.
I know that after you read this article you are going to be more prepared than most Buyers out there which is going to make YOU more competitive in the market place. Sit down with your REALTOR and have a conversation with them to find a reputable mortgage lender for pre-approval and express to them your needs and wants, and explicitly distinguish the two. Once you do this, you have built a rock-solid foundation to begin your home search and I can not wait to see what you find!