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9 Buyer Traps That Await in the Real Estate Market

Buying a new home is exciting, but it is also a massive commitment of time and money. It is important not to lose sight of practicality when purchasing a house. If something doesn’t seem right, it probably isn’t. These nine issues need to be kept in mind when you are looking to buy a house.

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1. Do your homework

The asking price might seem reasonable, but can the market support it in that area and for the number of square feet? Research the comparable properties to determine if it is a fair price. Without this information, the offer would be akin to bidding blind.

Property tax records are also vital. Check them out before deciding whether to put in an offer. Then use this information to craft a fair and reasonable bid for the property.

2. Buy the right house

The price might be correct, but is it the right house for you?

What does your ideal place look like, and where is it located?

It is easy to get overwhelmed when looking for your perfect home, and compromising on size and location may seem okay at the time. However, when the excitement subsides, you could end up with a house that is either too big or too small or is too far from where you need to be.

Before beginning the house-hunting process, write down what you are looking for and do not vary too much from your initial game plan.

3. Ensure the title is clear

One of the first things to do once you have decided on a house is to have a title search completed. You want to make sure that the property title is free and clear to avoid issues such as easements or tax liens.

4. Request an accurate property survey

An essential part of any property purchase offer is the request for a survey. Boundaries should be marked and up-to-date to avoid conflict with adjoining property owners or local ordinances. You may have plans to add a swimming pool once you move in to find that the actual property line precludes it.

5. Conduct a home inspection

Both you and the seller are trying to get the best deal for yourselves. Hire an independent property inspector to thoroughly examine the house and prepare a written home inspection, including a list of items that need to be fixed. Also, contact appropriate contractors for the estimated costs of those repairs.

Sellers will not necessarily hide pre-existing conditions but might not always divulge them either. For example, many homes are prone to groundwater flooding, which is costly to remediate. An experienced property inspector should be able to identify signs of previous flooding, which will save you considerable expense in the future by requesting that the seller either fix it or reduce the sale price accordingly.

6. Obtain a pre-approved mortgage

Nothing is more disheartening than finding your dream home to discover that you cannot afford it. Mortgage pre-approval is a fast and easy process and sets the parameters for your house hunt. A pre-approved mortgage also is a benefit if there are multiple offers on the house and yours is the only one with guaranteed money.

7. Adhere to the contract

The contract should include any repair issues requested by the buyer. Be sure to hold the seller accountable for each problem, preferably before you are at the settlement table.

8. Understand all hidden costs

Mortgages typically are full of hidden expenses such as underwriting and loan origination fees. Sit down with your lender ahead of time and review these hidden costs to ensure you have no surprises on the closing day.

9. Take your time on closing day

The closing day is a stressful yet exciting time. Be sure to look at every page that you sign to ensure that it reflects your understanding of the transaction. Do not rush the settlement just to get the keys to your new house, as doing so could result in having to live with long-term issues.

These are just a few items to keep in mind as you conduct your hunt for the perfect house. Take your time, identify your needs, and do not stray off course.

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