Buyers can make real estate mistakes that can take a lot of time and effort to reverse.
This is even more true once escrow has opened because banks don’t like last minute surprises during closing. So, it’s important for homebuyers to understand some of the common mistakes made that can cause the house to fall out of escrow.
3 Major Homebuyer Mistakes to Avoid
Be careful not to make these three mistakes once escrow is open so that you don’t end up missing out on the home of your dreams:
1) Withholding Valuable Information
There are a few reasons why homebuyers withhold information that is valuable to closing escrow in a timely fashion. Some of these reasons include the following:
- Worried about what others will think
- Believing they already have all the answers they need
- Don’t believe certain information is important
- Not much confidence in their real estate adviser (realtor, broker, agent, etc…)
Every buyer needs their own representative. Homebuyers should try to find a real estate adviser that represents their best interests. Buyer’s agents have a fiduciary responsibility to the buyer and must put what’s best for them above all else. They are real estate experts that can take care of a variety of deals, transactions, etc…
Your buyer’s agent is even experienced at handling nervous buyers. A buyer who’s thinking about changing their mind on a real estate purchase should contact their agent as soon as possible. They are great at handling such last minute nervousness. If you two decide the deal isn’t best for you, your agent can help ensure that you get your earnest money deposit returned.
2) Changing Financial Portfolio Before Closing
Once you have been pre-qualified for a home loan, and escrow has opened, do not make any new, major purchases until escrow is completely closed. Many potential homebuyers do not close escrow because they went out and financed expensive items before escrow closed. This completely changes your debt-to-income ratio, quite possibly changing you to a status of not qualifying for a mortgage loan. Here are just some of the items homebuyers mistakenly finance on credit while in escrow that will cause them to lose the home of their dreams:
- Cars, SUVs, trucks, motorcycles
- Washers, dryers, stoves, refrigerators
- Lawnmowers, tools sheds, gardening equipment
- Computers, laptops, stereo systems, televisions
- New furniture for the home in escrow
3) Purchasing the Wrong Home
One of the most frustrating mistakes many homebuyers make is purchasing a home that’s not right for them. Buying a home is a long process. So, is selling one. It only makes sense that a buyer do whatever is necessary to ensure that the home they buy is one they can be happen living in long-term. One good way to do this is by creating a list of buyer priorities. These aren’t general priorities, but wants, likes and needs that you, the buyer, personally desire. Decide what features and amenities you require to live comfortably and write them down. Make sure to share your list with your real estate agent to make it easier for them to find homes that are right for you.
Don’t Fall Out of Escrow
Mortgage lenders do not like last minutes changes to your financial portfolio during escrow. You need to be upfront with your buyer’s agent from the very beginning. That way, if there are any problems along the way, they will already be prepared for them. An experienced agent will know how to help you through most situations, as long as they have prior knowledge of them. Find an experienced real estate agent to assist you, and be honest and straight-forward with them all the way through the closing of escrow.
Article provided by Vickie Nagy. Vickie helps buyers and sellers with San Ramon CA real estate as well as surrounding areas including Blackhawk CA real estate and Danville CA real estate. If you would like to learn more about Vickie, please visit her website at http://vickiesellshomes.com/.
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Great advice. Buying a home is a big deal not only in terms of life stress but also money. If you are not upfront about things and things you are hiding are found, then whatch your stress go up as well as your expenses when the lender want to add on points because you are a risky client. Also, now it will possibly be more difficult to get a loan with red flags jumping at other lenders!