What Not To Do Before Buying A Home
Buying a home can be a time consuming, frustrating process. Considering how much of an investment a home purchase is and as it will be one of the most important possessions a person will buy in their lifetime, buying a home should be a time consuming, frustrating process. There are numerous open houses to go to and the rule of thumb is that for every home that you see that will appeal to you, there are five homes that you will see that will make you question whether or not you want to even buy a home.
Of course, once you find a home that you like, the hard work does not simply end there. Negotiating with the home seller becomes an issue and this process can bog down, as all bargaining sessions tend to be volatile in one way or another. Besides that, you have to undergo the numerous requirements that a lender insists on in order for you to receive a loan.
However, buying a home is easily worth all of the hassles involved in the process. There's no greater feeling than waking up on the first day of living in your new home and realizing that this is finally yours. Visions of renovations and future social events for your home will run through your mind for months after you purchase your home. Also, by owning a home, you will be making a secure investment for your future and enable a special moment in the future where you are able to give your home to your children, when that day comes.
Despite the good and bad aspects involved in the process of buying a home, it is essential to remember how important it is to follow the process of buying a home. There is a great deal of responsibility attached to buying a home and there are a number of actions that you just don't do before buying a home as it threatens the possibility of you actually buying a home.
Take this example of Jordan. Jordan was working as an investment banker for a successful New York firm when he decided he wanted to purchase a home in a suburb in New Jersey. Tired of the hustle and bustle of urban New York City life, Jordan desired for the comforting confines of a suburban home that would be similar to his adolescence in Pennsylvania. After several months of looking, Jordan finally found a modest but snug two-bedroom home in a New Jersey suburb and had finally agreed on a sale price with the home seller.
However, Jordan viewing this home purchase as an opportunity to shift gears in his life decided to quit his job as an investment banker to pursue his life long dream of being a fireman. Although Jordan saw this decision as purely a personal one, his loan source was not amused. The bank that had agreed to give Jordan the loan he required to put a down payment on his home soon rescinded their loan offer. This is because banks want their loan clients to have a consistent job history and become very nervous when their clients change jobs, particularly in a different field.
Once the bank rescinded their loan offer, Jordan was forced to trigger his financing contingency in his purchasing offer contract that allowed him to void the home purchase due to his inability to obtain a loan. Consequently, Jordan found himself having to pay rent in a New Jersey apartment as he continued on his path to become a fireman.
The moral of this story about Jordan is that a home purchase is not final until all of the paperwork is complete and the keys to the house are in your hand. Therefore, you should learn from Jordan's experience that the process to buying a home is not over until the home's deed is under your name and you have sole possession of your home's keys. Consequently, you should become aware of the numerous acts that you should avoid as they will jeopardize your ability to buy a home, even if you have already agreed in principal with the home seller to buy the home.
Advice For What Not To Do
By following the advice we are giving, you should be able to avoid many of the traps that potential homebuyers had fallen into. Purchasing contracts have been broken due to people breaking these rules and it is important to compile as much knowledge of what you shouldn't do before buying a home to avoid potential heartbreak if the housing deal becomes impossible. Therefore, here are some major things that you don't do before buying a home:
Don't make a major purchase
Making a major purchase before buying a home would seem to have little effect on your ability to buy a home, but unfortunately it has huge ramifications. Credit is an asset when you are trying to buy a home and making a major purchase can jeopardize your credit worthiness in a number of ways. This point will be elaborated on more in this website.
Don't change jobs
Of course, this rule does not apply if you have lost a job or are in line for a promotion, which therefore changing jobs is necessary. However, it is advised that you don't change your job if it is unnecessary as it leaves an opening for your loan source to question your credit worthiness. This point will be elaborated on more in this website.
Don't move money around
When you decide to move money around, you may be doing this for practical financial reasons. However, your loan source will not look at this action the same way as you do. By moving money around, you are jeopardizing your loan approval and leave yourself vulnerable from creditors who will insist on seeing the paper trail for your financial actions. This point will be elaborated on more in this website.
Don't give an earnest money deposit directly to a For Sale By Owner Seller
Most homebuyers and home sellers will love to conduct a property transaction without the assistance of a real estate agent. Therefore, many homebuyers often prefer buying homes from a homeowner who is selling their home directly (or a For Sale by Owner Seller, as this is known in the real estate industry). If you do enter into an agreement to purchase a home from a For Sale By Owner Seller, it is important that you take steps to protect your investment by not directly giving an earnest money deposit directly to the seller.
This is because these home sellers have the opportunity to spend your deposit money prior to the closing stages of the real estate transaction. There have been many cases where the home purchase was voided for valid reasons and the prospective homebuyer had to go to great lengths in order to retrieve their deposit. Consequently, it is recommended that your deposit should go into a trust account that the home seller will be able to access once the home is sold.
Don't let your emotions take over
Buying a home is a long process and there are many instances where emotionally you have the opportunity to become overly involved. During a home inspection, it is possible that you may become overly upset if a home seller refuses to do a small repair that was detected during the inspection. As the saying goes, the devil is in the details, and if you become overly emotional about one small detail in the overall context of the home, you can jeopardize the entire deal.
However, it is important also not to become too emotionally attached to a home. If the home requires a number of repairs and the home seller is completely inflexible about performing any of these repairs, do not be afraid of walking away from a bad deal. It is better to spend an extra month finding a great home for sale than it is to purchase a home that you fell in love with during the home looking phase but now are committed to for years.
Don't become best friends with the seller
Although it is always important to maintain a good relationship with the person who is possibly selling you a home, it is important that the relationship doesn't become overly chummy. This is still a business arrangement first and it is important that you watch your words when talking to a seller. Casual remarks about the home may jeopardize the business deal as personality conflicts often cloud judgments.
Don't ignore lender requirements
Even after you have agreed on a sale price with the home seller, your obligations to complete actions required in property ownership do not end. Therefore, you should continue to be aware of what is required of you and maintain an attitude that there are still important parts of a real estate deal to be done. This includes lender requirements, which is one thing that you should never underestimate. The power of your loan source is huge and failure to meet your lender requirements may cause you to lose your loan and therefore the financing you require to purchase a home.
