Buying a house will probably be the largest financial transaction of your entire life. So you need to go into it armed with the knowledge that will prevent your making mistakes you’ll have to live with for the next few decades. Still, many home buyers are not well enough prepared and often don’t make good purchasing decisions. To keep you from joining them, we offer these 7 mistakes buyers make in Los Angeles.
1. Neglecting Research and Planning
For such a large transaction, research and planning are vital, but many people neglect this preliminary step in the process. So before you set out house hunting, you should carefully consider your assets and existing debt and then get pre-approved for financing. Then, when you begin to locate some possible houses, research the neighborhood – things like crime statistics, property taxes, zoning issues, and so on – and check out the school system and local amenities.
2. Getting the Wrong Mortgage
One of the most common mistakes buyers make in Los Angeles is that of getting the wrong mortgage for them. And it’s a mistake that can have a huge financial impact for many years. Will a fixed rate mortgage or an adjustable rate mortgage work best for your unique situation? Consider carefully before signing the dotted line and committing yourself for years to come.
3. Exceeding Your Budget
Of all the mistakes buyers make in Los Angeles, this one may be the most detrimental to your financial future. It happens when emotion overpowers rational considerations.
You know how much house you can afford because you’ve done your preliminary research and planning. But don’t fall so in love with a house that you wind up buying it when it’s way outside your budget. Many times, you may actually be able to get the financing, but the reality is that payments and other inevitable expenses are beyond your means.
4. Tipping Your Hand
When it comes done to the nitty-gritty of negotiations, don’t make the mistake of tipping your hand. The home you’ve found may be your dream home, but don’t let the seller know that. Try to remain tight-lipped about how much you love the home. Otherwise, the seller will know that she is in driver’s seat and has more bargaining leverage.
5. Making a Desperation Purchase
The other side of the coin with respect to mistakes buyers make in Los Angeles is making a desperation or “fed-up” purchase. You may be tired of looking for and touring homes, but don’t give in and make a purchase simply because you’re worn down. Such a purchase usually lands people in a home and neighborhood they dislike – and in which they have to live for many years.
6. Waiving the Inspection
Simply put: don’t. Even if you’re a first-time home buyer on a tight budget and have to cut costs everywhere you can, don’t do it by waiving the inspection. You may save $500 today, but the problems you aren’t aware of because you didn’t have an inspection may cost you tens of thousands of dollars on down the road.
7. Attempting to Read the Contract Yourself
Real estate contracts have a language and complexity of their own, which is accessible only industry professionals. So don’t make the mistake of trying to read and understand the sales contract yourself. A qualified real estate agent and even a real estate attorney are your best recourse here.
Buying a home, then, doesn’t have to be as intimidating as it seems at first – if you make sure to avoid these mistakes buyers make in Los Angeles. Keep in mind, though, that these tips are just the beginning of what you need to know. There’s quite a bit more to know and do – and that’s where a qualified real estate professional can be a big help.