Many homebuyers jump the gun once their offer has been accepted. It’s important to keep in mind that they buying and closing processes don’t end there. There are a number of issues that can arise and knowing how to avoid these issues is the key to a successful closing. Afterall, you don’t want any added cost to your already expensive purchase, right? Here’s how you can ensure your closing goes exactly as planned.
Buying and Selling in the Same Market
One of the worst things that can happen is for a seller to back out of the deal due to their own remorse. This often happens when sellers’ are planning to downsize but the new home they purchase is not within the same market as their current home. This usually ends up costing them more than expected causing them to bow out and leaving you the homebuyer feeling disappointed.
Therefore, it’s a good idea when discussing the deal to inquire if they plan on buying in the same market. If this is your first home, take the initiative and educate them to make them aware that an out-of-market purchase could end up costing them more. If this is not your first time buying a home, and your getting a second mortgage to buy a second home, you too are encouraged to stay within your market and buy at the same time you’re planning to sell.
Don’t Let Bidding Errors Bite You in the Butt
The next biggest issue is overbidding. This is an especially important issue, especially if you’re planning to get a mortgage from a bank. If you overbid on your potential home and the bank completes their appraisal, they may feel that you’ll be paying too much. At this point you could pretty much kiss your chance of a mortgage approval goodbye, even if you were pre-approved. We’d strongly encourage you to have an extra 5% down payment, just in case.
No Home Inspection
When you put in an offer on a home, you don’t want to find yourself in a pool of disappointment after closing, simply because you failed to get a home inspection. The cost of a home inspection will be well worth it because other unseen issues could cost thousands to fix. A home inspection should be done on each home you’re considering and before you even bid on a home you plan to buy. Have more than one home that requires an inspection, can provide you with an added discount, so be sure to ask the home inspection company. The home inspection will provide you with a firm understanding of the home’s condition.
Don’t Buy and Sell on the Same Day
One of the biggest mistakes people make when selling their first home, and buying and closing their next, is that they buy, close and sell on the same day. We do warn against this. It’s always a good idea to leave a few days in between. Generally you should buy your new home first, then close your sale after. You may have to borrow a bit extra to do this, but it will be well worth it. You won’t find yourself stuck without the money you need to close the deal on your new home, where a buyer extension comes into play.
This is a huge mistake that can be easily avoided. You should also ask your seller if they are buying another home and recommended the same to them to be helpful and protect yourself as well.
Use Due Diligence – Don’t Close Your Own Deal
Buyers are always looking for a way to save money and most often consider closing their own deal to cut out the commission. As a result, most agreements usually have numerous errors or certain information is omitted due to verbal agreements. This is not wise for many reasons, anything not in writing can create future issues. Due diligence is required if you want your closing to go well. Having a mortgage broker or real estate agent on your side is the best way to ensure you avoid any and all home buying mistakes and get in the home you want without issues.
When we say YES! We stand behind our promise.
