As we have covered in previous articles, we are truly in a buyers market today and it’s a wonderful time to buy your long awaited piece of Smith Mountain Lake real estate. That does not mean that you should not be aware of how to do that in the wisest way possible however.
Below is an article by Stacey L. Bradford, who is the Associate Editor at SmartMoney.com. Stacey is all about helping the average person to understand the not so average world of real estate in a practical and up front manner. I appreciate the advice she has to offer, and if you are thinking of buying a home, you will too.
Here are five mistakes to avoid when looking for a home in today’s real estate market.
1. Waiting to Sell Your Home
Given the current housing environment, it’s more important than ever to sell your existing home beforeyou commit to a new one. Thanks to a glut of properties on the market and tighter lending standards for potential buyers, it’s going to take a lot longer to find a buyer than it would have a year ago. If you don’t start showing your home until after you’ve signed a contract for a new place, you’re taking on the added risk of carrying two mortgages for an extended period of time, warns Elaine Clayman, a real estate broker with Brown Harris Stevens.
Also, the only accurate way to know the real market value of your home — and, in turn, how much house you can afford — is to see how much someone else is willing to pay for it. “If for some reason you’ve overpriced the property you already own, you’ll know that after the first two or three weeks it’s on the market,” says Peter Comitini, a real estate broker with the Corcoran Group. Once you have a realistic picture of the amount your home will fetch, you can adjust your budget for a new home accordingly, he says.
2. Ignoring Your Credit Score
Get a copy of your credit report as soon as you decide to move. Nearly 80 percent contain some type of error and 25% of those mistakes are serious enough to drag down your credit score, potentially disqualifying you for the most competitive interest rate on a mortgage, according to U.S. PIRG, the federation of state Public Interest Research Groups. Someone with a score of 620, for example, would pay at least one interest point higher than a borrower with a score of 720 (or may not even qualify for a loan at all), says Geoffrey Sheerar, a mortgage broker with Apple Mortgage, a New York City-based mortgage brokerage firm.
Reviewing your credit report also gives you a chance to discover and settle any delinquent accounts. “I’ve seen a client get a worse credit score than he should have over a $40 doctor bill that went to collection that the person didn’t even know about,” says Sheerar. Keep in mind, once you find a problem, it can take several weeks and a bit of legwork to have the black mark taken off of your credit report.
By Stacey L. Bradford,
Associate Editor, SmartMoney.com
Thanks to AOL Finance for this great find.