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5 Mistakes to Avoid When Buying a Home – The Stephen Cooley Real Estate Show

In today’s episode of the Stephen Cooley Real Estate Show, Stephen and Julie Storm talk about common mistakes buyers do when they are buying a house.

Buyers should avoid these 5 mistakes:

  1. Buying on emotion and not your head.
  2. Forgetting that there’s another emotional party involved.
  3. Going it alone.
  4. Understanding the inspection process.
  5. Understanding what all loan programs you qualify for.

For more useful information watch this video:

Prefer to read? Here are the transcripts of the video:
(Please excuse spelling and grammar errors)

STEPHEN: Hello, I’m Stephen Cooley and welcome to the Stephen Cooley Real Estate Show and I’m very excited to have Julie Storm back on the show on our 18th season.

JULIE: Can you believe it?

STEPHEN: I cannot believe it. We’ve been providing real estate data for 18 years and we’ve seen it all, haven’t we?

JULIE: Yes, we have, the ups, the downs, the pretty and the not so pretty.

STEPHEN: And now that we are in 2018 that Julie we can definitely tell this is going to be a year and it’s a great year to sell your home and also to buy real estate, interest rates being so low rent, continues to go up and so a lot of people are paying anywhere from a $1000 to $2000 a month rent and when interest rates are so low that buys a two or three hundred thousand dollar house.

JULIE: You’re not going to remember when we bought our first homes and the interest rates were unbelievable.

STEPHEN: They’ve just dropped under 12% from 18% and so my little $60,000 house back in 1988, the payment was $1,100 and that would buy over $200,000 home today and so it’s made the price of homes even cheaper today than they were twenty and thirty years ago because what you pay for the house is a lot less important than what your interest rate is and so that just kind of leads me into things I want to talk about today. I want to get five things that buyers need to avoid when they’re buying a home. The first one is buying on emotion and not your head. Always compare it to going out and buying a car. Let’s just say you got a family and you need a minivan. And you get to the car lot and there’s a red Porsche two-door sitting there and it describes all your attention and a lot of the homes, Julie, built today they’ve got these massive foyers and these big open plans and they’ve got these gorgeous kitchens but they’re only 16-1700 square feet.

JULIE: You got to think about what are your living needs.

STEPHEN: Yeah, the more open the house, the louder it is in the home and so a lot of these homes that are new today, they’re small but they look really fancy like the red Porsche. So the best solution to that is to come up with a list of requirements: number of bedrooms, square footage, number of rec space, do you work from home and eat in office, how many people eat at the dinner table, how many people eat at your breakfast table and then write those requirements down, keep them with you and give them to your realtor who’s a buyer’s agent and tell the realtor ‘keep me focused on the fact that I need four bedrooms and every child needs their own bathroom’ and then we’ll keep you on track with that. The number two thing is forgetting that there’s another emotional party involved. When we go out and buy a car, the dealership or the manufacturer of the car is not emotionally attached to that beige car. The seller is emotionally attached to this home- they’ve got memories there, it’s been a wealth builder for them and when a buyer makes that offer you’ve got to remember you’re not dealing with a major national manufacturer of the product, you’re dealing with another sometimes family that is moving on and sometimes you’re moving home due to job, loss job change, job transfer not that happy about it so you got to remember that there’s another family involved or another seller involved in that.

Number three is going it alone. Julie everything is available on the internet today but the Internet does not analyze data and the internet does not tell you where a highway is going in or what school districts you may prefer based on the child that you have in whatever sports or other things that are important to that child, it doesn’t tell you what the future is for a neighborhood or a city or an area and only it’s just data and so you really need to hire a buyer’s agent. We’ve got great buyers agents on my team that cover all of our market but doing it alone on the Internet is not a good thing. It’s a good source to use.

JULIE: It’s a good way to kind of get an idea of what maybe you want but you definitely need guidance when you’re in this process because it’s such a big decision. This is somewhere you’re gonna live every day.

STEPHEN: I bought a vacation home a few years ago and I used the realtor in that area, then I sold the vacation home and I used a realtor in the area so if I’m willing to pay them for their expertise I think everybody else should too.

The fourth thing is just understanding the inspection process. You fall in love with the home and then you have an inspection on the home and you find out the home’s not perfect. You’ve just got to get used to that, just like when you go on a date you find out the person’s not perfect, the homes not perfect too and then we have things in the contract, one’s called a due diligence period, to where there’s a time frame where you can say okay based on all my inspections I’m not gonna buy your home. That is something that we recommend just keeping in mind that everything about a home is repairable and a lot of times the seller will make those repairs, especially if the damage happens while they own the home so getting through that inspection process and number five is understanding most of us get an investor to help us buy our home. When I call them an investor I’m talking about a mortgage company, a bank and they lend up to 100% of your investment. FHA loan is 96.5% of the investment so you’re asking a stranger to step in and loan you pretty much all of the purchase amount and then you have payments back to that mortgage company. Understanding what all is available to you sometimes a veteran should not get a VA loan, sometimes even though you’ve got $100,000 in the bank, sometimes it’s not the best idea to put all that down on the down payment. It’s really understanding what all loan programs you qualify for and then which one best suits you and again that falls back on a great buyer’s agent who can navigate through all those options and connect you with a great mortgage company that can explain to you these are the five mortgages that fit your criteria and these are the reasons you should use each of those. Those are the five tips for buying a home for 2018 to keep people focused on making sure this is a fun event, buying a home needs to be one of the most exciting things in your life. You don’t want anything to go wrong with that. We’ve got these five tips and we’ve got great agents on my team. Julie, always a pleasure to have you on the show.

We’ve got beautiful houses for sale in your area, please stay tuned we’ll be right back.

I hope you’ve enjoyed watching the Stephen Cooley Real Estate Show. If you’re interested in advertising your business on the program please give us a call at 803-326-2777. Join us next week for more discussions on real estate topics and help in finding your perfect home. Thanks for watching.

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