April 28th, 2009 3:14 PM

Big Bad Buying Mistakes

Via Kathleen Frawley Your South County Connection (Keller Williams):

# 1 biggest mistake:  Waiting until the market hits the bottom. 

Are you kidding? First of all we won't know the bottom was hit until about 60 days after it happened.  Second of all, Sellers will get the news flash the same day you do.  So guess what...prices will increase.  (probably dramatically and immediately)  So sitting on the couch biting your nails and waiting for "the bottom" won't help any one.  If you need a house, and will have comfortable payments, by all means get it.  You don't want to tell your friends in a couple of years you missed the boat.  (would've could've should've)

Mistake #2:  Not being pre-approved.

Pre-qualified is NOT the same as pre-approved.  If you submit an offer on a house you love with only a pre-qualification, in this market, you probably won't get it.  In fact, banks look at a pre-qualification as only a maybe-long shot-risk-gamble-slight possibility of qualifying.  in fact if they have multiple offers (which is very common) they may use your contract for a dartboard or to line the bird cage.

Pre-approval is golden.  Harps will play in the background when your offer is submitted with a pre-approval.  It will let you know exactly what you qualify for, and helps the process flow much smoother.  No brainer...get pre-approved.

Mistake #3 Betting on resale.

As a rule real estate increases in value.  As a rule over any 12 year period, real estate increases in value.  READ that:  12 year period.  The numbers, statistics, history, gurus, and geniuses say 12 years.  Not two weeks, not 6 months, not a year.  12 years.  Bottom line here: don't over extend yourself.  If the payments are comfy cozy buy it.  If it will rent for more than your payments, buy it.  (easy to do in this market) if cash-flow is positive right now, or you are prepared to wait 12 years for capital gains buy it.

If you think you need it right now because it will double in value immediately, and you will over extend yourself or bet the farm to get it, Call me- I'll talk you down.  That is not a smart way to live your life, or invest your money.

Those are the three mistakes I see most often, and the ones I can think of right now, but likely, i will post more later.

 

"Mistakes are part of being human.

Appreciate your mistakes for what they are:

precious life lessons that can only be learned the hard way.

Unless it's a fatal mistake, which at least others can learn from."

Al Franken

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