10 Biggest Real Estate Mistakes
Selling:
1. Not preparing your home adequately for the marketplace. Simple repairs, paint, a nice yard make a huge difference. A nicely maintained home is ALWAYS desireable, particulary if you want top dollar.
2. Not listening to OBJECTIVE market data regarding the price of your home. Every seller thinks their home is worth more than the exact same one next door!
3. Not cleaning up your clutter. Your treasures may be junk to someone else. A clean, neat home appears larger. Cluttered closets and garages make it seem that there isn't adequate storage. Rent a storage unit, have a garage sale, just get rid of as much as you can!
4. Not allowing your home to be accessible. If realtors can't easily get in to show it, it will just sit there.
5. Basing their price on what they "need to get" from the home - based on remodeling they did, upgrades they paid for, or the amount they need to buy their next home. Just because you paid $20K for a pool, does not mean your price is $20K higher than the house next door.
Buying:
1. Not getting pre-qualified for a loan. You are wasting your time, the sellers time and the agents time if you are not ahead of the game in getting a loan. Particularly now in 2008, the loan market has changed dramatically and it is much more challenging to get loans. Underwriters have tightened up their criteria and it takes longer to get approvals. Get with a mortgage broker, your bank or credit union and get started before you go out looking at properties.
2. Buying more that one can really afford. Be realistic - you don't want to feel house poor. This is partially what contibuted to many people losing their homes now, they had champange appetites on a beer budget - and are now facing foreclosure. Get a home that you like and a payment that you love!
3. Not understanding their loan. There are many to blame on this one. But, now that this wave of sub-prime mortgages is waning, we all recognize the importance of truly understanding the terms of the loan you are taking. Fixed, adjustable, when, how, prepayment penalities, interest rates, points, etc. It is very complex - so be sure to ask lots of questions!
4. Being afraid to make offers. You'll never get anywhere without making that first offer or it may take many offers to finally secure the home you really want. Although it is a buyer's market, there are still multiple offers in many cases. It may be in the case of an REO or short sale that there are mulptiple offers and the bank will decide. Or, it may be a well priced, very nicely maintained home that generates multiple offers. Really, there is very little commitment on the part of a buyer making offers. Even if it is accepted you have a 17 day contingency period, wherein you get a "free look" at the home and can back out at any time in the 17 day period (getting you earnest money refunded in whole).
5. Not thinking beyond their primary residence with regard to real estate. Owning additional property can be an ideal component of your retirement. You can now buy a single family home in San Diego for $250K. At this price, the rent can cover the mortgage. In 15-20 years your renter will have paid off the home, it will have perhaps doubled in value and can be a nice part of an overall reitrement portfolio. Your initial "investment" could be a $50K downpayment. You may generate a small monthly positive cash flow and have a paid off asset worth potentially $500K in 20 years! (Not to mention possible income tax benefits).
