5 Roadblocks on the Path to Your New Home

When you are purchasing a home, you want to have the smoothest transaction possible. There are five roadblocks that can prevent that smooth transaction from happening. 

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Whenever you purchase a home, there are five major things that can happen that can stop our sales. Today I am going to share those five roadblocks, so you can know what to avoid if you are buying a new home.

1. Damage. Damages can occur when the seller moves out, or from a contractor who has caused additional damage. To remedy this, you must always do a walk-through inspection. This can help you avoid discovering that things are missing, such as light bulbs, fixtures, or—even worse—appliances and cabinetry.

2. Due diligence.  During the home inspection, ensure that all the repairs requested by the inspection are completed. Also, make sure that your insurance is active the day that you close—accidents happen, and you do not want to accidentally cause a fire. If your insurance is not set up at closing, it could cause a delay.

3. Survey. Survey the land to find out where proper property lines are. This is something a lot of agents push to the side, but do not let them. Surveys are very important.

I personally purchased a duplex as an investment property and noticed something was strange about the lines. I had a survey completed and found that the neighbor had encroached 15 feet into the property that I was purchasing. I ended up giving him notice and putting up a fence. Now I have an entire parking spot for my tenant.

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I completed a survey of a property that I had purchased, only to discover that the neighbor had encroached nearly 15 feet into my new property.

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4. Major purchases. Refrain from big dollar purchases. Buying a car will affect your credit score, which may affect your mortgage rate and eventually affect your ability to even purchase the home.

5. Loan approval. If a person unknowingly does something to impact their credit, they may be unable to secure a loan. Leaving a job or making an expensive purchase are just two of the ways someone may accidentally damage their score

A loan company verifies your employment the day before closing. If you quit or lose your job the day before, you may end up unqualified for the loan because of lack of income.

Having the money in the location it needs to be is also crucial. If you are receiving the money as a gift, it needs to be wired to your account before closing to verify that you have the sufficient funds. Very few people will let you have the keys to your new place if they are waiting for money to be approved for one reason or another—make sure that the funds are ready.

If you have any questions about this or are interested in buying or selling, please feel free to contact me. I look forward to speaking to you soon.

Don’t Make These 3 Common Homebuyer Mistakes

If you are using a loan to finance your home purchase, there are three mistakes you need to avoid if you want to close on the property.

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In this market, 90% of homebuyers get a loan, while 10% of buyers pay cash. If you are getting a loan, there are a few things you need to know.

It’s always crazy when we get to a closing table with a buyer who has an amazing income, great credit, and a good job only to find that they are denied from getting the loan.

The buyer then loses their earnest money and any money they spent on appraisals and inspections, not to mention the emotional investment they made in the home. If you want to get the keys to your next home, there are a few things you need to remember.

First of all, don’t make any large purchases. Don’t buy a car or any furniture. Big purchases put a balance on your credit card, which could be a red flag for lenders. Big purchases also push your ratios, which could impact your credit score. Avoid buying any big-ticket items. I would be very careful about spending over $100, and I would avoid spending over $500 altogether. You can always buy furniture once you have the keys to your home.

Also, let’s say you buy the furniture and something else happens to cause the deal to fall apart. Now, you’ve not only lost your home, but you’re also stuck with a couch you can’t return. Just wait until you actually close on the property until you buy any furniture.

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Wait until you have the keys in your hand before you make any large purchases.

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Secondly, make sure you stay at your job. I’ve seen buyers quit their job just two or three days before closing. In order to buy a home, you have to have income to pay the mortgage. The bank usually verifies your employment the day of closing or the day before, so don’t quit your job the same week you close.

Even going on sabbatical or medical leave can negatively affect your closing. If you are not actively working, getting a paycheck, and making money, you won’t be able to get into that home.

Finally, don’t start applying for additional credit. If you start applying for different credit cards, your credit score will be affected. Applying for more credit also raises a red flag for the lender. They may wonder if you are applying for credit because there is an issue with your income.

Ultimately, the best thing you can do is just sit tight until you close on your home. Don’t apply for credit, don’t make any major job changes, and don’t buy a boat or a car or furniture. Just hold on until you have the keys in your hand.

Here’s a little bonus tip as well: Make sure that the down payment can be refunded. Deadlines can be moved and closing can be delayed, so make sure you are flexible with those. If the deal does fall through, make sure you can get your money back.

If you have any other questions about buying a home in our current market, just give me a call or send me an email. I would be happy to help you!