How to Lose Your Home
Mistakes Can Equal Loss
Remember a few years ago there was a movie called, "How to Lose Your Lover"? Owen (Paul Schneider) had to plot and plan his way to losing his girlfriend. Unlike Owen, people don't consciously plan to lose their homes. As a matter of fact, most home buyers don't consider the possibility that they might lose their home. However, mistakes do happen and often the reason sellers decide to sell is because of the mistakes they made when they bought the house in the first place. Many times people who buy homes are well versed in the market, they ask the right questions, and hire professionals to work with them. But, despite all of this preparation, they're headed for disaster. Why?
Mistake #1
Well, there are a few reasons this happens, some of which we'll go into in this article. The first on our list is: Attending No-Money-Down Seminars. You call the toll-free number to get your seat at a seminar that promotes books, CDs, and all kinds of discounted services "only for those who are here and especially for the first 50 people who make it to the book table without being trampled." A slick guru who knows everything there is to know about real estate (but probably has never bought or sold a piece of property) convinces you to buy all the stuff. Now, you're so smart you're telling the pros how to do it. Using the sage advice of the guru, you make dozens of lowball offers that keep getting rejected until you manage to find a seller who will carry the financing at 18% interest with a 3-year balloon payment. Nice work.
But, He's Such a Nice Guy
Choosing a bad agent is another way to lose your house. You start with the premise that all agents are equal, since all have a license. Don't interview the real estate agent - you don't want to be offensive by asking hard questions or trying to figure out what he's saying. Find an agent that is really cheap, he's hungry and he'll work for you - even if he has no experience. Then refuse to sign a buyer's broker agreement. After you've seen several weeks worth of homes, go to the listing agent and have him write a purchase offer for the house you want to buy.
Money, Money, Money, Money....
Clean out all of your resources and savings to come in with some money for a down payment. Beg, borrow (but don't steal) money from everyone you can to make up the closing costs. You barely make it through, but at least you have some equity going into the deal. If money is short, put it on the credit card or borrow against your card. Then be sure to keep doing that for all of the repairs and maintenance costs you'll incur once you're in the house. Be sure to collapse your funds and retirement savings as well - might as well make a clean sweep of it.
Hey, I Can Handle This
Be sure to refuse professional help - after all, they're just in it to close the deal, right? They don't care about you or what happens to you, they're after the money. You don't need them. You've got your family who own a house, so they can give you the answers to questions you can't answer yourself. Don't check information on the internet, or read books about real estate, or ask for help from another professional - especially a lawyer or accountant. You don't need to be filled with information like margins, caps or indexes. After all, you have a low interest rate and a low monthly payment. What could possibly go wrong?
These four situations are just a few of the reasons people end up losing their homes, often within a very short time of making the initial purchase. Obviously, the best plan is to have a Realtor or real estate agent working for you to help you find your way through the maze of buying a property.
