4 common mistakes people make when buying or selling

Are you getting ready to buy or sell your house? If so, you likely know there are several steps involved in the process! It’s important, however, to ensure that you act wisely in the market. There are several common mistakes people make when buying or selling, and they can have lasting negative effects on your homeownership experience. Here are four common mistakes from both buyers and sellers, and how to avoid them.

Common buying mistakes

#1 Improperly budgeting for closing costs

Closing costs are a relatively small portion of the total expenses incurred when you buy a house. However, if you don’t budget properly for them, or forget to budget altogether, they can become a big and unpleasant burden. 

Your closing costs include things like legal fees, moving expenses, land transfer and title taxes, and utility adjustments. They are the last items you will need to pay before you can move into your new home. Many buyers get so caught up in budgeting for their down payment and mortgage costs that they overlook these other expenses. Closing costs tend to be about 1.5 per cent of your home’s purchase price. Be sure to budget ahead for these expenses so you aren’t surprised by them later.

#2 Rushing the process

Buying a new home, especially if it’s your first, can be super exciting. It’s easy to get ahead of yourself and try to get in and out of the market as soon as possible. The quicker you find the right property, the sooner you will own your dream home and the faster you can escape the stress that comes with buying! 

However, rushing the process is a common mistake. You shouldn’t speed things up just so you can call yourself a home owner sooner. Rushing could result in buying a home that isn’t the right fit for your lifestyle or budget, which can have negative consequences down the road. While it’s important to be efficient during your housing hunt, try to balance efficiency with speed. You don’t want to dawdle, but you really don’t want to rush!

#3 Choosing emotion over logic

Buying a home can be an emotional experience, and it’s easy to fall in love with a home that doesn’t match your current needs or abilities. For example, viewing a property that has all the amenities and touches of your ideal dream home can make it super tempting to put in an offer on that property. However, you should take a step back and consider whether the property you love is truly affordable. People often make the mistake of buying with their hearts instead of their brains, and end up struggling with debt and buyer’s regret later on.

A simple way to avoid this is to only view homes that are in your budget and are real options for you. This gives you the chance to fall in love with a house that matches your needs, without compromising your financial security.

#4 Skipping key offer conditions

Since every home sale is unique, every offer is as well. Prices, closing dates, and fees will all differ between offers. However, there are two conditions that every buyer should include in their offer. 

First, it’s essential that your offer is conditional upon the property passing a home inspection. This will ensure the property is in good shape and there are no unpleasant surprises waiting for you when you move in. If an inspection does turn up any problems, you can either negotiate with the seller, or walk away from the sale if you cannot meet in the middle. 

The other key condition is that the home must pass an appraisal to ensure it is worth your offer price. Conventional lenders will not finance a mortgage for more than a property’s true value. This means it’s important to confirm whether your offer is one your lender will support. If the appraisal comes in too low, this condition protects you from having to go through with the sale if you aren’t able to secure the financing you need. 

Common selling mistakes

#1 Drastically over or underpricing the property

Pricing your home properly is essential as a seller. You want to ensure you are getting a good offer on your property, without asking for an unrealistically high amount. Striking this balance can be challenging, and improper pricing is a common error.

Listing your home for more than its fair market value can have a negative impact on the number of offers you receive, limiting your options. On the other hand, pricing your home too low might mean selling yourself short and missing out on the best offer. Working with a real estate agent is essential as a seller to ensure your listing price is fair, competitive, and appealing!

#2 Improperly preparing the home

Selling your home is a lot of work, but you shouldn’t try to cut corners in terms of preparing the property. If there are any major repairs or renovations needed, it’s best to get these done before you put your home on the market. Otherwise, potential buyers might be less likely to put in an offer if they know they will be buying a home that needs obvious work.

Similarly, staging your home might be a good option. Some people have a natural eye for decor and styling, and their properties are show-ready. However, if this is not the case, hiring a professional to stage your home in a tasteful manner is a great idea. First impressions matter, and you want people to walk into a space that is appealing.

#3 Refusing to negotiate offers

Selling your home can be an emotional process. A common error sellers make is taking the experience too personally when it comes to offers and negotiations. If someone submits an offer that you feel is below the home’s value, it’s easy to feel offended and want to immediately reject the offer. However, try to take a step back and look at the sale with an objective view. Is there room for negotiation between yourself and the buyer, where you can meet in the middle? 

Your real estate agent will also play an important role here. They can see your home through a more impersonalized lens, and are more likely to have the fairest idea of what a good offer is. It’s important to keep an open mind!

#4 Not planning for the future

As a seller, it’s easy to get swept up in the process of putting your home on the market and securing the best offer. However, don’t forget your next moves! What are your plans for the future? Are you going to buy a new home, or turn to renting? Do you know when and where you plan to move? These are important questions to ask yourself before you begin the selling process. You don’t want to sell your property without a clear idea of where you will be headed next. Be sure to chart your course before setting off!

There are lots of common mistakes people might make when buying or selling a home. The good news is that you can avoid these altogether! By acting wisely, budgeting properly, and timing your market entry correctly, you can enjoy a smooth transition as a buyer or seller. If you need more assistance from your local mortgage broker, feel free to reach out to us. We are happy to guide you! 

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can contact us at (902) 482-2770 or contact us here.