As real estate professionals, we’re tasked with guiding our clients through the often complex process of the real estate transaction. Sure, it’s an exciting time, but it’s also a major financial commitment and likely the biggest investment anyone will ever make. Not only is it our job to make sure that our buyer clients make all the right moves, it’s also our responsibility to do what we can to help them avoid making mistakes that could cost them.
Here are some common mistakes that buyers making when on the prowl for a new home, and what you can do to help steer them in the right direction.
Not Going in Prepared
Even before buyers pick up the phone to call you, they should have done a little prep work first. If they haven’t, it’s up to you to gently remind them of the work they need to do before the house hunting process even begins.
For starters, buyers should take the time to go through their financial assets and debts to get a rough idea of how much they can afford. Following that, they should get in touch with a seasoned mortgage specialist who can review all the necessary documentation regarding their income, debt, assets, and all other financial information to gauge how much of a loan they may be approved for.
If your clients have not taken these steps, recommend professionals on your contact list to make things a little easier for them. After your clients have had the necessary discussions with a mortgage broker and/or financial advisor, it will make your job a lot easier to focus on properties that fall within their financial comfort zone.
Getting Blinded By Cosmetic Appearances
It’s easy to be mesmerized by the allure of a visually appealing home. All that attractive hardwood flooring, custom kitchen cabinetry, and brand new bathroom finishes might look amazing, but they shouldn’t distract your buyer clients from other potential issues that they should be looking for before they decide to buy.
Obviously, cosmetic finishes are very important to the overall appeal and value of a home, but the buck doesn’t stop there. Be sure to keep your clients realistic about anything that may be problematic with the home that will warrant some fixing, if present. A home inspection will be able to uncover various issues with a home that may not have been noticed during the showings.
Not Scoping Out Different Neighborhoods
You clients might be fixated on one particular neighborhood, whether it’s because of a certain school that they want to be close to, the proximity to the city center, and so forth. But instead of just focusing on one specific area, your clients should shift their focus to what makes an ideal neighborhood in their eyes.
Consider the features that your clients need that make for the perfect community, including amenities, parks, proximity to public transit, and so on. Once these details have been identified, you just never know if the perfect home for your client is located in a neighborhood they may never have even considered before. The broader the options, the wider the scope of opportunities.
Rushing the Process
Your buyer clients may be anxious to find the right house to buy, but this is definitely not a process that should be rushed along. If possible, try to convince your clients to work within a generous time frame. This is a big commitment, and is definitely not a situation to risk the dreaded “buyer’s remorse.”
Take the time to look at as many homes as possible, and even when you find “the one,” encourage your clients to visit the property at least a couple of times to get a better idea of what it will be like to live there and call it home.
Foregoing Important Contingencies
Unless your clients are looking for a tear-down or are paying all cash, contingencies should be heavily encouraged to protect your buyer clients. Even if they object to inserting two of the more important and common contingencies - financing and home inspection - explain to them that these are included in a purchase agreement as a means of protection.
As professionals in the world of real estate, we know what can happen if buyers are unable to get approved for a mortgage and fail to include a financing contingency. Similarly, it’s too late to back out of a deal if a major issue with the home is discovered after it’s closed, which is where a home inspection contingency can be a real life-saver. Explain the potential consequences of not inserting these clauses in order to look out for the best interests of your clients.
The Bottom Line
Buyers - especially first-timers - are vulnerable to making mistakes during the house hunting process if they don’t have the proper guidance from their real estate agents. What every buyer should know is that the real estate process is an often complicated one that can be riddled with complexities that are tough to navigate on their own. By working with seasoned real estate professionals, they’ll be able to avoid costly mistakes and stay on the straight path to a successful real estate transaction.