The Costliest Mistakes Made by Military and VA Home Buyers and How to Avoid Them.

Mistake #1 – Hiring the Wrong Mortgage Company

               

Photo by Lance Cpl. David Bessey

Shopping for the perfect mortgage?  Are you comparing companies in the newspaper and online for their interest rates?  Some mortgage companies appear to guarantee buyers the lowest interest rates, but if the buyer isn’t careful, these mortgage companies may make up the difference in payment by charging huge processing fees that are referred to in the industry as junk fees.   Far too often, home buyers discover that a good deal isn’t always what it seems.

                 Some online mortgage companies have been found to provide incorrect closing costs because they’re out-of-state and unfamiliar with localized closing costs such as transfer taxes.  Worse, there are mortgage companies that charge an application fee on a credit card and then fail to deliver a mortgage on time for your closing.

            Additionally, while many mortgage companies advertise that they assist veterans and can write VA loans, not all lenders understand the process the same.

             Ask friends, relatives and your Realtor which mortgage companies have consistently provided good service and truly understand the VA lending process.   Our team at Century 21 Keim Realtors can provide you with a list of mortgage companies we’ve worked with locally.  Call us at 800-648-4421 for a no obligation list.

Mistake #2 – Thinking VA Loans Will Cover All Costs

When you are purchasing a home with a VA Home Loan, it is important to remember that while the VA will help you with a great deal of the home buying process, it will not cover everything.  In some cases, a buyer might purchase with no money out of pocket, but depending on negotiations with the home seller, some VA buyers may have to pay some closing costs.  Consult a Realtor with experience in selling properties with a VA mortgage.

Additionally, the VA is not responsible for or cannot guarantee that there are not any defects found in the house that are in need of repair. The VA will conduct an appraisal of the property, but this is not an accurate inspection. This appraisal is not a close look at the condition of everything in the home or on the land of the property. So, if you find that termites have attacked the house, or your water pipe suddenly bursts, the VA cannot be held responsible.

Mistake #2 – Neglecting to Have a Home Inspection

                Would you buy an old used car without having it thoroughly inspected by someone you know and trust?  A home may have issues which will cost far more than any car repair, and purchasing a home may be the most expensive investment you make in your lifetime. 

                Any home may have hidden defects that could cost thousands of dollars to repair.  A failing septic system may cost an owner tens of thousands of dollars.  Mold problems may create health issues for you or your children.  Radon gas may cause cancer.  Lead paint, water penetration and hundreds of other issues may be avoided when they are discovered by a home inspector before you buy the home.

                Spending a few hundred dollars to investigate potential defects or expensive repairs in a home could literally save you many thousands in the long run.  If you’re planning to purchase a home and would like a free list of professional, licensed home inspectors, call our team at Century 21 Keim Realtors. 

Mistake #3 - Limiting Your Search

The majority of buyers have their hearts set on a particular neighborhood or city. But why limit your search area? Some buyers want to live close to their place of occupation, or keep their children in a specific school district. Regardless, it’s worth checking out other areas. It’s possible for your child to excel in another school district, and the extra time that it takes to commute to work may present the opportunity to decompress before arriving home.

Mistake #4 - Not Visiting the Property Multiple Times

There’s nothing wrong with bidding on the first house that you see. However, plan to visit the property at least twice before submitting your offer. If a seller is motivated and ready to sell, he or she may rush the process or try to force you to make a hasty decision. But remember, once you sign the closing papers, there’s no turning back.

Drive through and check out the neighborhood during the weekends and evenings. Are the neighbors rowdy? Is there loud music? Are the children playing in the streets or being noisy? Checking out the neighborhood when the majority of the residents are home can help you determine whether the area is a good fit for you and your family.

Mistake #5 – Not Doing the Proper Research

               

Double check the property taxes, the school district, the neighborhood, your commuting distance to work and anything else that may affect your enjoyment of the home you’re about to purchase.  Choosing the wrong home, or purchasing too quickly without proper research, can lead to headache and heartache after the sale.

Mistake #6 – Not Hiring a Buyer’s Agent

                Do you realize that buyer representation is free with firms like Century 21 Keim Realtors?  You get professional, personal representation in the purchase of a home without paying a dime.

                Why is that important?  Why can’t you simply call the listing agent for each property you might want to view?  Many home buyers don’t realize that the listing agent for the property is likely to represent the best interests of the home seller, not you.  That means their fiduciary responsibility is to the seller.  They have to disclose everything you tell them and they have an obligation to get you to pay the highest price possible for the home.

                A buyer’s agent represents your interests instead of the sellers, and you don’t pay anything for that service.

 

Mistake #7 – Working with Several Realtors at the Same Time

               

Some homebuyers feel that if they simply talk to many agents, there will be that many more Realtors out in the market trying to find the best home.  The truth is usually the opposite.  A Realtor has a limited amount of time, and can typically only service 5 to 10 buyers at a time.   They will spend their time working hard on those who are committed to working with them.  When a buyer shops between many agents, the agents realize it and devote little time to searching out the perfect home.

Mistake #8 - Not Budgeting for Repairs and Maintenance

Many new homebuyers think they should try to get the most expensive home that they can afford, but there are other expenses that should be budgeted for -- like repairing the furnace or roof. Home ownership comes with a different set of expenses than just renting, and new buyers need to factor in things like higher monthly utility bills and the cost of upkeep on older homes.

Mistake #9 – Don’t Make Decisions Emotionally

Emotional mistakes are common among homebuyers, who overpay for their "dream homes" because they let feelings cloud their judgment, or back away from a great opportunity because they get into conflict with the seller.

But buyers shouldn't beat themselves up for getting emotional. Buying a home is often the biggest purchase a person will make.   Buyers should be aware of emotional mistakes many of their peers make.