With record-low mortgage rates, surging home prices, and a shortage of inventory, the housing market continues at a frenzied pace. But that shouldn’t force buyers to cut corners just to save or money. You’ll end up sinking yourself.
Purchasing a home is a big investment and buyers should take advantage of the guardrails provided by real estate professionals and going through the steps necessary to protect this large investment. So here’s some advice that I give to friends and clients alike:
First, don’t go it alone. Get a good realtor to represent you. A real estate professional can help you do a lot of the leg work. They can help you find the right home for your needs and point out benefits and drawbacks of certain properties. They will know the local market prices and can also help you with the negotiations, and with the closing process.
Second, make sure the sales contract is subject to a property appraisal, and be sure to get your own professional appraisal done. Banks require them before making a loan, but even if you pay cash or have private financing, the appraisal will tell you if the price is right. Moreover, if the contract is subject to appraisal, you’ll have the opportunity to back out of the deal.
Please don’t skip the steps that have been put in place to protect you and your investment.
Many people who are in a hurry skip land surveys, and septic tank inspections. My advice: Don’t do it.
A survey is important because it will tell you the exact layout of your property and the boundaries or if you will have to deal with a neighbor in the future. An expensive — and usually unpleasant — situation.
Septic tank inspections are another guardrail that people want to skip over because they require a separate inspection that’s not usually included with a general home inspection. They take time and cost money. It’s better to spend the money for the inspection rather than to find out after the closing that there’s an expensive problem that has to be fixed such as a bad connection or worse yet – that the entire tank or the drain field has to be replaced. If there’s a problem, you can negotiate the cost of the repair or replacement from the price of the house or decide to walk away from the deal.
Finally, protect yourself against any losses due to defects in title by getting title insurance. With this insurance, you can rest assured there aren’t any other claims to the property or liens against it. If a defect is found, you’ll know beforehand, and be able to work with the seller to clear everything up. The insurance is well worth the cost. It is certainly cheaper than trying to fight off someone else’s claim to the property once it’s in your hands.
Bottom line? Even if you’re in a rush to buy a home, do yourself a favor and don’t cut corners. Take the time to work with real estate professionals who will help you through the process, protect your investment and more importantly protect your peace of mind.