The steps to becoming a homeowner can be daunting with an awful lot to think about and do, especially if it is your first time. With the financial stakes being high, a false move can end up as a pricey lesson. Here are four common home buyer mistakes to be aware of to help make the home buying process hiccup-free.
- Not talking to several lenders, comparing mortgage interest rates, & terms.
Similarly to how you might shop around to find the best deal for any other product, it is best practice to shop around for a mortgage lender. Be sure to request quotes on the same day to get the most accurate side by side comparison. On top of looking at estimated mortgage rates, pay attention to the quoted lender fees and third-party closing costs.
“It is important to find a lender who is a good fit in overall costs but also in service provided,” said top South San Francisco agent, Wilson Leung. “Find a lender who has competitive rates but is also extremely responsive for our fast-moving Bay Area market.”
2. Not knowing how much home you can afford.
Understanding your limits will help save time and allow you to focus the home search on properties within the correct price range. The most important factor that lenders use as a baseline for how much someone can actually borrow is their “debt-to-income ratio” or DTI ratio. DTI ratio shows how much if your income is needed to pay off debt obligations such as a mortgage, credit card payments, student loans, etc. Check out this great resource in helping calculate your affordability before even talking to a lender: affordability calculator.
3. Not thoroughly reviewing disclosures and inspections.
Due diligence, due diligence, due diligence! Reviewing a seller’s disclosure and inspections can or break a transaction and ultimately helps protect the buyer from potentially pricey defects or problems down the line. Buyers should review these documents with a local realtor who is familiar with the jargon. Note a disclosure statement is not an inspection report; disclosure statements are always required however not every seller will have a pre-inspection, and not all buyers will choose to do a home inspection. Here’s a list of documents to expect in the San Francisco Bay market:
– Boiler Plate Disclosures
– Home & Termite Inspection
– Energy & Water Audit & 3R Report
4. Not working with a dedicated local agent during the search.
Work with a full time, local real estate agent who is 100% dedicated to helping you in this next big step in life. In our fast-moving Bay Area market, properties move within 1-2 weeks from ‘active’ to ‘sold.’ A full time, responsive agent will ensure disclosures are carefully reviewed on time, and the correct offer strategy is in place to put your best foot forward in an offer. In short, having this key player on your team can make or break getting into that dream home!
Before interviewing realtors, check out our video series “10 Questions to Ask Your Real Estate Agent” for a list of must-ask questions to ensure you’ve found the right agent.
*Have additional questions about the real estate process or want to discuss your real estate goals? Give us, your top South San Francisco realtors, a call today!
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