What you wish you had known before buying a home.
“If only I knew. Things would have turned out so differently”, confessed a home Buyer.
How many times have we prefaced our thoughts with; If only… If only we knew before, if only we did it this way, If only someone had told me, the “if only’s” could go on and on.
If only you knew a few things before setting out to buy a home: what you wished you knew before buying a home.
So if you’re asking yourself what should you know before buying a home, my article today will uncover many things that are important to know before buying a home. And, if you’re here in my neck of the woods where you’ll be buying a home in Boca Raton, Coral Springs or anywhere in southeast Florida, you’ll certainly want to read my article before setting out to buy a home. In fact, no matter where you live, you’ll find that there are many Real Estate Agents who excel at selling homes who’d want you to know the subject of my article – these need to know items can apply anywhere!
If only you had known these topics of discussions below, before buying a home.
How important it is to clean up your credit before buying a home?
Stop what you’re doing and really pay attention to this. This is probably the most important thing you can do for yourself in order to buy a home. It takes some planning. It won’t take a lifetime. And you can get it done when you know what you need to do.
Where do you start?
Pay your bills on time – set up auto alerts so you don’t miss a payment. You can easily do that on your smartphone’s calendar, your desktop, laptop to tablet calendar to alert you when a bill is due. Set it up to alert you a few days before, so you can pay your bill on time. You can also set up a payment to be paid automatically from your checking account so you don’t have to even worry about it. Paying more the minimum, in full, is best…knowing that keeping your credit utilization rate below 30% is the ideal way to boost a credit score. This means it’s ideal to never carry a balance more than 30% of your credit limit.
Review your credit report – you want to check for any reporting errors.
Don’t open up a million credit cards – you don’t need that, keep your cards to just a few.
Use your credit cards as if they were cash – use them, yes, but pay them in full each month. Only use what you have the cash to pay for each month.
Mike and Sandy wish they had known this before they bought their home in Coral Springs Florida this past year. They had been saving money for a down payment, yet didn’t pay too much attention to their credit other than assuming it was okay, enough to get by. Later realizing that due to their credit being simply fair to good, that they weren’t being offered the best rates of interest for their mortgage; translation…higher mortgage interest rate. They’re kicking themselves too, as they had planned quite some time to save the money and looking back, they certainly would have had the time to clean up their credit too. They could have had a lower mortgage payment had they only known earlier.
That you don’t need 20% down when buying a home
It’s true! There are many different loan programs available where you can have a downpayment as low as 3.5%-5% of the home’s purchase price. That’s almost music to your ears, I bet, as that’s a huge difference from the needed 20% down. For example, on a $350,000 home, 20% is $70,000 – not pocket change! Yet, let’s say 3.5% down is $12,250. Still not pocket change, yet a goal that’s a whole lot easier to reach than $70,000, don’t you think?!
John wanted to buy a home for so long and it took him several years to save up 20% for a down payment. It wasn’t easy for him. He sacrificed a lot when he looks back now. And to think he could have owned a home much sooner in life, well…he doesn’t like to talk about that much.
That it’s not always as easy as HGTV proclaims
In a perfect world, you’d look at 3 homes, like them all, select the one that is just right, you move in and live happily ever after. Sometimes it can be only 3 homes that you look at, but what is missing is what can come after you’ve selected the home to buy. There are a whole lot of steps that you must go through before you get to the closing table. Read my article here where I discuss, “What Happens at a Real Estate closing?”
Susie and her sister Jill decided to go together to buy a home in East Boca near the trendy Mizner park area and were so excited to get started and get moved into their new home by Christmas. After religiously watching HGTV where you look at 3 homes and pick one, they soon realized, 10 homes later that it took several weekends and the viewing of several homes before they found the right one. To this day, it’s almost painful for them to watch the HGTV home buying shows, where they illustrate that finding that home to buy just seems so easy peazy, when in fact, it wasn’t that easy for them at all.
That your home inspections will reveal issues.
Having your home inspected is a very important part of the process when buying a home, yet don’t get alarmed when the home inspection report reveals what seems like a hundred different items that need addressing. Nothing in life is perfect and the same holds true with any home you plan on buying, no matter how well the home was maintained.
Don’t fret over the little things. Yet, at the same time do not think that you should forego the little things, as a little thing can become much larger if you ignore what needs to be addressed. As a new homeowner, you’ll want to keep your home maintained with routine maintenance schedules adhered to for your new home.
What usually matters most with a home inspection are the larger, expensive items such as the roof, the air conditioner (so relevant here with the hot south Florida temperatures), appliances and anything that can amount to thousands of dollars in costs; this is where an inspection proves to be most valuable.
Georgia and Lucas had raised their family of 4 boys and 1 girl in the same home having spent 25 years there. This was the only home they had ever purchased. Shortly after the kids had grown and were moved out, they decided that it’s time for them to downsize. They didn’t have the use for such a large home now.
They put an offer in on a home and the home inspection that soon followed revealed so many darn, little, itty bitty things. Do they really want to have to deal with these inspection issues? They just wanted to buy a home and move in and not have to mess with worry about anything wrong with the home. Can’t the Seller just fix all these things? They demanded that the Seller fix every little thing. The Seller refused. Georgia and Lucas missed out on a really nice home. Looking back, they’re so mad at themselves that they let these minor items cloud their decision. They really liked that home. They’re still searching for a new home.
That trying to get a good deal in a Seller’s Market may be more difficult.
First, you’re likely scratching your head and asking, what the heck is a Seller’s market? A Seller’s market is when Real Estate conditions favor the homeowner who is selling a home. Typically, there are not enough homes for sale to meet the demand from home Buyers, like yourself. Competition is fierce amongst home Buyers and you’re always ready at a moment’s notice to pounce on a new home. (Imagine an alert dog waiting for it’s owner to take him for a walk, ready to go at any moment).
When a home is priced correctly and presents itself well, it will sell fast and expecting a “good deal” when homes are in short supply is not the norm. More times than not, several home Buyers will do whatever it takes to “win” the home where you often see a Buyer’s offer coming in above the home’s list price. This type of offer is more prevalent when a home Buyer has been defeated in the past having lost out on a home they wanted to buy and this time, they’re not going to lose; they go in as gangbusters.
Read about how much money to offer in my article here: “I Found a Home to Buy – How Much Money do I Offer?”
Wyatt had been doing what seemed to be the right thing; educating himself about buying Real Estate as an investment. His first investment property that he wanted was a small single family home that needing some attention and fixing up; wasn’t in the best of condition. Everything he read was about getting a good deal. Wyatt had wanted a good deal and he wanted it now. The only problem for Wyatt occurred when he was trying to buy a home in a neighborhood that was experiencing a hot Seller’s market and every time he presented his low bid offer, it was rejected. Wyatt did some more research along with taking his Realtor’s advice and discovered another neighborhood, not such in high demand, and finally got a good deal on a home. Unfortunately, it took trial and error.
That not every Real Estate market is the same as the news may report as a whole.
There are different Real Estate markets and simply because the news claims there’s a certain prevailing type of market, don’t presume all cities and neighborhoods are the same. Real Estate markets will vary. Perhaps your neighborhood market is experiencing a Buyer’s market when your city as a whole is experiencing a Seller’s market – it can happen. Differing markets need for you to employ different home buying techniques that your skilled Realtor should be well versed at and able to explain for you.
Fake news can indeed run amok – learn more about such fake Real Estate news. Here in an article I wrote, you’ll discover: “Top 4 Fake Real Estate Revelations and the Truth Revealed”.
Lily, the sister of Wyatt above, had been speaking with her brother hearing about all of the troubles that he was experiencing in finding a good deal, which prompted her to give up before even trying, after all, how can she get a good deal if her brother had such a hard time located in South Florida.
Lily lives in Detroit Michigan. Was she assuming the markets to be similar? She had looked at several homes and finally offered full list price on a home which was immediately accepted by the homeowner. Looking back she kicks herself, realizing she likely could have gotten a better deal as Detroit was experiencing a Buyer’s market, which her Realtor hadn’t advised her about. Next time, she’ll choose a Realtor better too.
That buying a home directly from the Listing Agent does not benefit you.
Were you thinking that you’d save money if you dealt with the Listing Agent?
Perhaps you had thought the Seller would only have to pay half of a Real Estate commission due to there just being one Real Estate Agent processing the home sale. And, then because they’re paying less commission (only one Agent), they’d then accept your lower offer to buy their home. Unfortunately, it doesn’t work that way. A Real Estate Agent and their Brokerage establish the commission to be paid prior to a home even being put on the market for sale. The percentage commission agreed upon by these parties, is then simply split up if there is another Agent, such as a Buyer’s Agent should you choose to have represent you in the home sale. If you aren’t working with a Buyer’s Agent and go with a Listing Agent’s guidance, then a Listing Agent would receive the full commission (no savings passed on to you).
Isaac and Savannah learned really fast that the technique they were employing wasn’t going to benefit them at all! They had been advised by their parents that it’s best to have their own Realtor representing them … well, just because it was what their parents had said didn’t mean that they were in agreement and since they weren’t real convincing in explaining the benefit behind it, their advice was ignored. Also, if you look up stubborn in the dictionary you’ll find a photo of Isaac and Savannah.
They found a home that they wanted to buy and thought they’d use the Listing Agent to represent them in the sale only to discover that the home Sellers had no interest in accepting their lower offer. They thought they would accept it because if was 3% less than the list price and not having to pay the Listing Agent due to them not having their “own” Realtor then they’d save money. Didn’t save the home Sellers any money, as they now just had to pay the full 6% (3%/3%) to their own Realtor. Really? Is that how it’s supposed to work? Isaac and Savannah soon discovered that yes, that’s how it works. No special deal was made.
That being house poor is not it’s all cracked up to be
You’d do anything to own your own home.
You’ll cut out your daily coffee at Starbucks (or cut down perhaps) or switch to the less expensive brand, such as, delicious Dunkin Donuts, after all; they’ve adding comfy couches to their restaurant shops. The Friday night Pizza and beer can be trimmed too and the one more pair of shoes addiction will stop too. Eating out Saturdays at the nearby Main Street will stop to just one a month now.
Wait a minute. Is that really going to make you happy? Who are you fooling?
Owning a home is what you’ve been yearning for, for so long. You did so much to be able to afford a home, yet changing your lifestyle for homeownership is not healthy (unless of course your habits are indeed excessive). Maxing out your home obligations will likely create undo stress. Don’t do it. Being house poor is never a good thing. Plan wisely.
Della had lost her husband to heart disease a year ago and had decided to buy a new home, a smaller home for just her and her Yorkshire Terrier doggie named Zola. She and her husband had lived in a luxury home for many many years while raising their children and it was filled with luxurious furnishings and decorations and rooms upon rooms, it seemed. However, now it’s way too much home. She found a new home walking distance to downtown where she and her husband had loved to go. During the last 10 years of their lives together, Della’s husband had lost much of his fortune and they didn’t have the huge nest egg for retirement that they had hoped to have.
Della found a new home to buy after selling their family home. Her kids were telling her that it seemed like too much house for her; “Are you sure you really need so much home mom…why don’t you just get something small and less extravagant?” She remembers her kids concerns. Unfortunately, she didn’t listen to her kids and went with the maximum that she could afford. Now, sometimes when her widowed friends call her to go on a cruise with them, she has to decline and she just doesn’t have the extra money now. Della is miserable. She overspent in her home purchase and is house poor.
That your purchasing of pricey things are put on hold
You’ve done everything right up until this point, you’re Pre Approved for a mortgage and you seemingly crossed all your “T”s and dotted all your “I”‘s, so to speak.
You’re excited beyond words and you can hardly wait to fill up your new home with new furnishings; new bed, new dining room table, new couch and new flooring for the whole home – you can hardly wait to rip out the home’s old carpeting.
You’ve been doing some shopping online for months scouting out the perfect items for your home, bookmarking many sites and even saving them to your Pinterest Boards. Now that you found your home and have gone under contract you want to be ready for your brand new stuff to be delivered the day of your Real Estate closing; how could you possibly wait beyond the day of closing? You want everything to arrive the day of closing. You paid for it all and scheduled the delivery.
Do you have any idea what can happen when you spend money on large purchases while going through a mortgage loan approval? You don’t want to find out. Primarily, you risk increasing your debt to income ratio, which will blow your loan approval when your debt is not too high.
Zachary and Brittany, the first within their group of millennials to grab ahold of the idea of home ownership, went under contract with their first home during the summer month of June. The home they’re buying is located just 5 minutes from the beach in Boca Raton Florida. Seeing how they love the beach and can’t quite afford oceanfront living right now, this is the next best thing.
Closing was roughly less than a week away when they got the news from their Mortgage Lender that their home loan was denied. What?! Yes, you read that right. Due to all their spending for their new home before they even closed on their home had pushed them into a much higher debt to income ratio. These purchases were reflected on the credit report when a new report was ran by the Lender’s underwriter to confirm their qualifications. Too risky of a Buyer now. They won’t be buying the home and they’ll likely be canceling all of their new purchases.
Having a place to call your own home can be so wonderful if you garner all this knowledge before buying a home. Learning and getting the cold, hard facts is crucial. Don’t be the one who’s being interviewed for a local Real Estate Blog article sharing your dreaded Real Estate home buying experience. Instead, learn from these confessions.
If only you knew this before, you wouldn’t have waited so long to plan and prepare for homeownership. You’d likely be reading this from your own, new home.
Want to read some more helpful home buying resources? Check out these expert Real Estate articles:
Questions to ask your Agent as a Home Buyer by Wendy Weir
Will going directly to Listing Agent save you money? by Kevin Vitali
Real Estate Language for home Buyers by Anita Clark
Things Buyers do that cost them money by Ellen Pitts
Ways to get your Pre Approval revoked by Bill Gassett
Reasons for a home Buyer’s consultation by Maria Mastrolonardo
First time home Buyer’s process by Eileen Anderson
9 Facts home Buyers don’t know by Michelle Gibson
Home Buying Pitfalls by Lynn Pineda at ImagineYourHouse.com
Today’s Real Estate article “True Confessions – What Home Buyers Wish They Had Known Before Buying a Home” was written by Lynn Pineda. You’ll find Lynn selling homes in Southeast Florida in the cities of Boca Raton, Boynton Beach, Coral Springs, Delray Beach, Coconut Creek, Deerfield Beach, Margate, Parkland, Pompano Beach, Tamarac, Sunrise, Plantation and Ft Lauderdale areas within Broward and Palm Beach counties. Call Lynn at 954-464-1100 if you have questions about buying a home in Boca Raton to Coral Springs and around!
Lynn Pineda, a licensed Southeast Florida Real Estate Agent serving Southeast Florida for over 11 years. Keller Williams Coral Springs Realty. Real Estate Promises Delivered. You can speak with Lynn by calling/texting her at 954-464-1100 or you can email her at: LynnP@ImagineYourHouse.com if you need to buy or sell a Southeast Florida home. Your local, trusted professional when it’s time to buy or sell a home. Real Estate promises delivered.