7 Critical Steps to Avoid Real Estate Pitfalls
November 11th, 2008 categories: Interesting Tidbits, Real Estate News
 
If you’re getting ready to embark into the real estate world, as a buyer or seller, there are a few very critical things to remember as you go about the process. These are tips that I use to educate my clients on a daily basis. The’re all very important and valid points that will clearly benefit you by implementing them.
 Skipping the loan pre-approval step. For buyers, getting pre-approved for a mortgage gives you a clear idea of how much you can safely borrow and gives you insight as to what mortgage programs are available. Most importantly it identifies you as a serious buyer who’s done their homework. Sellers who have a great property and have priced it right, will have much more buyer interest and should expect proof of pre-approval from the potential buyer’s financial institution. Why waste time on an unproven buyer.
Timing the market. This is probably my biggest peave in real estate. Why buyers and sellers feel they can time it “just right” are living in La La Land.  Have you ever tried timing the stock market? I rest my case . . . Once in a great while I’ll meet someone who happened to sell and gain optimal profits, but their reasons were usually driven by the timing being right for them, not for profit.  If you think the market has bottomed out, chances are it has already started it’s way up. Always take the approach that real estate is a long-term investment.
Not understanding the length of the buying/selling process. The home-selling process is often more extensive than you think, from the early planning stages to protracted negotiations to often delayed closings. Financing can get held up, buyers may have a tough time selling their old house, repairs needed that the inspection uncovered etc. Don’t back yourself into a corner time-wise, the last place you want to find yourself is living in a hotel with all your belongings in a truck.
  Curb your enthusiasm.  The moment you drove up, you knew you were hooked. Now you’ve been inside, it’s absolutely heaven!  Now’s the time to play the game and keep that poker face. If you let the sellers or their agent know you love the house, you are giving them a position of power.  They may assume you might forgive some flaws because it’s your dream home. So, hold on to that giggle, shout for joy, or statements announcing “this is the one”, until you get in the car and close the door.
 Poor timing. Unfortunately we’ve all heard about people committed to a new house before selling their old one? Sometimes, you have little choice in the matter, but when you do, secure the sale of the old house before signing on the dotted line for the new one. Sure, you hate to miss out on that rare find and you might have to find an interim rental, but that’s better than spending time in financial limbo and biting your fingernails to the quick.
Hiring the wrong agent. You may not benefit by opting for an agency’s top-volume seller. That top-producing agent may have listed 40 homes last year and sold 30, but another agent may have listed 15 and sold 14. Opting for a friend or family member who is an agent doesn’t assure you of results either. It could cause a rift. And choosing the agent who suggests the highest listing price is not a recipe for success either — nor is opting for the agent who charges the lowest commission. Remember the SEED qualities in an agent: Smart, Empathetic, Experienced and Dedicated will usually get the job done right.
 Thinking appraisal equals actual value. In theory, appraisals are objective estimates of value. But several different appraisals can yield several different numbers. For example, an appraisal that’s been done for a possible refinance may have been slightly inflated to encourage that refinance. So sellers, before you put your home on the market, have an agent do a comparative market analysis to better indicate the home’s worth. And buyers, get similar “comps” from your agent. But realize the true value of a house is what someone is willing to pay for it.
Sandy,
Great insight and suggestions.
Aloha,
Keahi