Falling in love too fast can cause first-time buyers to turn a blind eye or gloss over problems that might be deal-breakers to experienced buyers. Missing a structural defect is an obvious pitfall for any buyer, but the following seven dangers often plague first-time buyers.
1. Not ask the right questions. Along with the final œsin, this one is key. First-time buyers may fail to discern what is important and what is not. The œfeel you get when walking into a home may be less important than other factors since it comes largely from staging and good decorating choices. Buyers need to look past the pretty face and ask the important questions about unseen issues: Is the infrastructure (water source, pipes, utilities) sound and reliable? Are there easements through the property? What are the property boundaries? Any nuisances nearby such as noise or air pollutants? Are any changes pending for the neighborhood?
2. Underestimate costs to repair or improve. Unless you call up several contractors and get written estimates, you may not realize what it will cost to make repairs to improve the property. It™s cheaper in the long run to pay inspectors and other building professionals to give estimates before buying a property. One of the most savvy and experienced buyers that I™ve ever represented as a Realtor conducted the most studies and investigations of a property during the escrow process. My file was nearly a foot and a half thick! They did an in-depth home inspection, on-site mold testing, geological drilling, water testing, and more. They had virtually all systems professionally inspected: a roofing contractor came out to inspect the roof, an electrician tested the electrical system, a plumber checked the plumbing etc. Before they made a final decision to purchase, those buyers knew everything about the property including what it would cost to fix and improve it.
3. Take permit issues too lightly. Does the property have a permit violation? Many sellers have modified their homes œwithout the benefit of a permit. In some localities, officials could make a buyer take out or tear down unpermitted improvements. A trip to the building department to pull copies of a home™s permits is time well spent. Or you can pick up the phone and order these documents from a permit search service…for a fee.
4. Fail to renegotiate the deal. Getting an offer accepted is just the first step in the negotiation. As a buyer investigates the property and becomes aware of its flaws and drawbacks, and every home has some negatives, he or she is in a much better position to negotiate with the seller. Asking for repairs or a credit in lieu of repairs is not uncommon. Of course, a seller does not have to agree, but first-time buyers shouldn™t hesitate to renegotiate.
5. Misjudge the impact of regulatory agencies. The California Coastal Commission may be the most notorious agency as it holds sway over properties five miles inland from the Pacific coast. A first-time land buyer recently received the bad news that œCoastal as it™s called did not approve his application to build a home on the upper level of a two-acre lot that sits about five miles inland since building there would have disturbed a small portion of native brush in the 200-foot circle of influence around the home. The agency required that the home be built on the lower portion of the lot right next to a street, which meant the owner had to give up the more private location back from the street along with a glorious 180 degree ocean view. Worst of all, Coastal had approved the upper building site years earlier so the buyer assumed the agency would issue such a permit again.
6. Ignore location, location, location. Location refers to more than the neighborhood. Experienced buyers consider how a property is located within the neighborhood”at the end of the cul du sac (good), right below a large water tank (bad), next to a vacant lot or open field (could be good or bad, depending). It also matters how the house is located on the lot. Many buyers, for example, prefer a home that sits above the street and affords more privacy while avoiding water runoff issues.
7. Miss the big picture. Unlike first time buyers, experienced pros such as real estate agents quickly size up a property in terms of its strengths and weaknesses. First-time buyers fall for the hype: the sizzle rather than the steak. They respond to the tidy and well-staged small model home over a larger well-built custom home full of clutter and mismatched old furniture.
Personally, I like to hunt for a property during the winter months when the weather is bad, and buy a well-located distressed property that needs cosmetic repairs and a good cleaning after I’ve thoroughly checked out the property and the neighborhood.
What’s YOUR view?
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