By Chad Taylor
As the listing specialist for our team, I often cover topics concerning our seller clients in this column. Today I wanted to share with you some common misconceptions that we continue to hear in the market from buyers.
Our team is committed to coaching and educating our buyers so they will feel comfortable and confident with their home purchase. And in the event that they have to get into a bidding war, we want them to win (and they do most of the time). The following misconceptions could stand in the way of a successful purchase and can be completely avoided.
So let’s get started.
Misconception 1: I need to look at homes before I meet with a lender
Our team hears this one a lot and nothing could be further from the truth. Looking at homes before meeting with a lender is like buying shoes without trying them on first. How do you know if they will be a great fit? Should you buy smaller or larger? A great lender will discuss all of your financing options and help you discover a home price that is truly comfortable for you and your budget.
Let’s say that you go see some homes and you find one that is PERFECT for you and your family; however, you are not pre-approved for financing. You then panic to get pre-approved and rush through the process foregoing that great discussion with your lender. During this time, your dream home has received an offer from a buyer who had taken the right steps first and is solidly pre-approved and fully under-written (we will discuss this later). And in an instant, your dream home is under contract.
The aforementioned scenario is a heart breaker. And just like any other time your heart has been broken, the one that got away is hard to overcome. No matter how many great homes are to follow, some that may be even better than the dream home, in your mind the one that got away is really hard to beat. Why would anyone want to go through that? All it takes is a simple interview with a lending professional to ensure that your financing is in order prior to shopping.
Misconception 2: All I need is a down payment to make a home purchase.
Yes, a down payment is the lion share of your costs (3.5 to 5 percent of the purchase price). However, there are other costs that a buyer should budget for when purchasing a home. Aside from title and closing fees, a buyer should set aside $1,000 to $1,500 for home inspections. Most buyers are prepared for a whole house inspection, but that is just the tip of the iceberg. A whole house inspection is a great place to start. But what should the entire inspection process look like?
Our buyer team suggests that buyers minimum standard when conducting inspections should be a whole house inspection ($375 to $400), termite inspection ($75), radon test ($150 to $175), and a sewer line scan ($200). In addition to these, a buyer can perform a mold test ($400) or have a structural engineer evaluate all of the structural components ($400). As you can see, it adds up quickly. And it is worth every penny. We want our clients going into their purchase “eyes wide open.”
Our team can confidently say that our clients are well educated in the workings of their home by the time they get their keys.
Misconception 3: My parents (uncle, brother, cousin, best friend) say that I should start out with a low ball offer to see how the seller will respond
I am a family man, so please don’t take this the wrong way. I have seen some well intended family members ruin a real estate purchase for another family member. More than once we have seen a buyer’s parents coach their son or daughter to low ball a seller because that is how they did it when they bought their home…in 1980! The market environment has changed just a little since then, don’t you think?
We encourage our clients to involve their parents from the very beginning if they are going to be part of the decision-making process. That means that they should be present at the initial buyers’ consultation. Then they will hear the discussion about today’s market conditions and how those conditions affect how a buyer should conduct themselves. As I have said before, our business is all about setting expectations.
If you have any additional questions concerning the home buying process, please email or call us directly. We are here to help.
This weekly sponsored column is written by Chad Taylor of the Taylor-Made Team and Keller Williams Realty Key Partners, LLC. The Taylor-Made Team consistently performs in the top 3 percent of Realtors in the Heartland MLS. Please submit follow-up questions in the comments section or via email. You can find out more about the Taylor-Made Team on its website. And always feel free to call at 913-825-7540.