I’ve heard it several times the past couple of weeks. Home buyers who couldn’t buy a home of their own sign a lease on their rental for another year.
First-time-home-buyers turned renters. It is supposed to be the other way around. Watching another year’s worth of rent thrown away has got to hurt. All for what? Why?
Plenty of people successfully bought a home this past Spring, so why not you?
Maybe you made some of he following mistakes. And if you learn from them, next year will be much better.
1. You were intimidated by the “Seller’s Market.” Between the media and the big mouths on real estate agents, it was impossible to ignore the buzz around low inventory and rising home prices in the Boston area. You have two choices when faced with this challenge: fear or strategy. Which did you pick?
2. You started too late. This is a forgivable offense. Only once you begin looking at property you realize searcing for a home takes a lot longer than you think. Give yourself plenty of time to look at many properties and familiarize yourself with all the aspects of home buying.
Yesterday I had a closing with clients who counted about 50 houses they saw before choosing the home they eventually bought. This prepared them to make an excellent choice and move quickly and aggressively when it was time to do so.
3. You didn’t hire a buyer’s agent. Really? C’mon. What’s to be gained by going about a big, complex and expensive process without professional guidance. We’re not out to screw you, you know!
4. You hired a weak / stupid / clueless / brand new buyer’s agent. In this market, a buyer’s agent job is tough. She needs prepare you for a fight, provide you advice you don’t want to hear, and give you lots of bad news. There are many experienced agents who can barely stay afloat in this market.
In a seller’s market, a buyer must hire an agent who understands the dynamics, comes highly recommended, and who may push you out of your comfort zone. Likability is great, trustworthiness more important.
5. You made offers with a “pre-qualification” or a “pre-approval” from a disliked lender. Bank of America and Chase earned themselves terrible reputations in mortgage lending. And the seller doesn’t want to hear about your buddy who works at Sloppy Mortgage, Inc.
Prepare yourself to work with other lenders with stellar reputations. Many local banks are doing a good job these days; another good choice are in-house lenders at the real estate companies.
6. You looked for a bargain or ways to pay less. HA! I work with many sellers, they know the market, they don’t want to hear from you. No one has a bargain for you.
My favorite bad move is to offer a lot less money when you have cash. The risk to the seller of a mortgage is not so high with highly qualified buyers. Several of my clients chose an offer from a buyer with a mortgage over cash offers this Spring.
7. You looked at past sales to determine value. You should look at past sales to get an idea of where the market HAS BEEN, but your offer should reflect where the market is GOING.
You need to expect to pay tomorrow’s prices. It’s a rising market, and if you do not go with the flow, you are chasing the market. Would it have been cheaper to make a better offer instead of another year renting?
Look ahead. There is nothing you can do about what has happened in the past. It’s relevance is minimal.
Don’t give up on your search. Start early, prepare well, hire good help. Perhaps next Spring market will be kinder. If not, you will be sharper.