The BIG Mistake
Can you prevent the BIG Mistake that other Barrie home buyers have made?
About 90% of will-be buyers make this mistake, so it's likely you're a candidate. The ironic thing is that it starts out perfectly harmless... please read on...
Is this the kind of path you'll take?
- You're curious about the real estate market, but you're in no rush to purchase. Over the next few weeks or even months you surf the Internet in complete privacy because it's so easy to find homes. You visit a number of websites to view photos and read information.
- One day you plug in some numbers into a mortgage calculator on one of the sites. You're pleased with the purchase price you can afford and you modify your search limit.
- Eventually, you make a few notes on some of the homes you find. Different real estate brokerages represent the properties and you diligently jot down the REALTOR® names and phone numbers. You have a list of questions for each property.
- It takes a while but you ask your questions to each REALTOR®. They try to engage you in conversation and inquire about your situation and status. You are a little reluctant to open up to them because you fear a sales pitch and possible pressure. You're still only curious and just want some quick answers.
- On one call you talk with a REALTOR® who has a listing that seems to fulfill all your needs. You're excited, and would like to see this home as soon as possible. The REALTOR® obliges and you work out a time.
- The home is perfect and you'd like to submit an offer to the seller right away. The REALTOR® quickly gathers information from you so he can pin it together. The negotiations go fairly well and you agree on price and terms. Your time now starts for the conditions in the offer, usually they are for financing and home inspection.
- You visit your bank the next day and fill out an application for a mortgage. You feel confident about pricing because of the mortgage calculation you did on the Internet. A few days pass as the lender works out the details. You soon receive a call and its bad news. Your credit score is too low, your downpayment needs to be higher, and you lack the necessary time required at your current job for the lender to feel comfortable about giving you a mortgage. You're not approved, and you feel a little embarrassed.
- You now need to call the REALTOR® and tell him to cancel the deal. You've lost the house you love. And of course the Seller is not happy either since their home was taken off the market waiting for you to meet your conditions.
Are there any problems with this path?
1. All the homes listed with a real estate brokerage that you found on the Internet are also on a REALTORS® local MLS® system. REALTORS® cooperate together through this system to find, show, and sell properties. During your calls you may have found that some of the homes were already sold, or off the market for some reason. Every website is not always current with up to date information, but the MLS® system is. You could've saved a lot of time and frustration by having a REALTOR® send you homes that met your needs.
2. Did it ever occur to you that each REALTOR® you talked with was representing the seller in the transaction? That seller is looking for the most money possible, and you're probably looking to pay the least amount. Some would say that's a conflict of interest.
3. You instructed the REALTOR® to prepare an offer for the most expensive purchase you'll ever make, and to do so as quickly as possible. It's a little unfair to both of you. The REALTOR® has quite a long checklist of things to cover in an offer, and needs adequate time to organize it. Good things happen when the proper time is allotted. Also, you're probably excited and scared at the same time. There are a number of clauses, questions, conditions, and concerns for an offer like this. You should take the time to truly understand what you're signing, and agreeing to.
4. You're submitting an offer on a home, and it's the only one you've seen. How do you know the seller's asking price is a good one? How do you really feel about all the homes qualities when you have nothing to compare it with?
5. The financing approval did not go well either, and all in all it turned out that 'your' time, the sellers time, the REALTORS® time, and the lenders time, was all misused.
And the solution is...
Pre-qualifying with a mortgage calculator is not the same as actually being pre-approved. Visit your bank and obtain mortgage approval 'before' you start to search for homes. This way, everything is in place and you will have confidence when negotiating your deal.
Buyer Representation is critical these days. Why work with the seller's REALTOR® when you can have your own? It's favourable to have a formal discussion about the buying process, costs, your home search, and about the offer and all its clauses so you have a thorough understanding of it before you put pen to paper. There's a lot more to be aware of than just the possibility of your financing falling apart. You will also need other professionals to help you along the way. Your REALTOR® orchestrates this for you, which takes the guesswork and burden off your shoulders.
Interview some REALTORS® at the outset even if your purchase is months away. We're not all the same. Some will give you pressure and the sales pitch you might dread, but others are all about comfort and trust. Our consultations are always free, friendly, informative, and without obligation, so there's everything to gain and nothing to lose. Sit in, find out if we're the right fit, and then proceed accordingly. It's easy, and it makes sense.
As much as you'd like to do things in complete privacy, and ward off any conversations until it's absolutely necessary, you actually can do yourself an injustice by proceeding down this path. We've heard it happen to so many and they're left feeling deflated. Home choices is more than just choosing the right home, but it's about choosing the right path to get you the right home. There's a big difference in that statement.
The BIG Mistake that some buyers fall prey to is lacking the guidance from a REALTOR® at the outset, and therefore lacking the preparation and the information required to make the right decisions. But you can change that, and you can definitely keep your dream in sight without doing things on your own.
Please call us at 705-722-5705 to schedule a friendly talk. It's pressure-free, good clean help. Let us 'Show You a Way' to the best deal.