Blog Post 28: 5 Home Buyer Mistakes in 2022
Blog Post 28: 5 Home Buyer Mistakes in 2022
5 Mistakes I Saw Buyers Make in 2022. Not my buyers.. let me be clear 😉
The last few years in the real estate market have but nothing short of a rollercoaster. With the constant fluctuation it’s extremely difficult for buyers to know which strategies they can implement and the options available to them. The following is a summary of 5 Home Buyer Mistakes I saw people make in 2022.
Home Buyer Mistake #1:
Buyers didn’t research different loan programs available to them before purchasing real estate. There are so many ways to qualify for a mortgage, down payment assistance and lower rates. From first time home buyer program, loan programs based on your occupation, and loans based on your investing goals. Buyers should do their research too as it’s more than just what rate you can get.
There are many different loan programs available for those looking to finance a real estate purchase. Here are a few examples:
- Conventional loans: These are traditional mortgages that are not insured by the government. They usually require a down payment of at least 20% and have stricter credit and income requirements than some other loan options.
- FHA loans: These loans are insured by the Federal Housing Administration and are designed for homebuyers with lower credit scores or limited funds for a down payment. They typically require a down payment of at least 3.5% of the purchase price.
- VA loans: These loans are backed by the Department of Veterans Affairs and are available to active-duty military members, veterans, and their families. They offer competitive rates and often do not require a down payment.
- USDA loans: These loans, backed by the United States Department of Agriculture, are available to homebuyers in rural areas who meet certain income requirements. They often offer low interest rates and do not require a down payment.
- Jumbo loans: These loans are for homebuyers who need a mortgage for a higher-priced home. They generally have higher credit and income requirements and may require a larger down payment.
- DSCR, or Debt Service Coverage Ratio loan is a loan that is granted based on the borrower’s DSCR. Lenders may require a minimum DSCR for a loan to be approved, and may also consider other factors such as the borrower’s credit score and the property’s value. DSCR loans are often used for commercial real estate purchases or refinancing.
- DSCR, or Debt Service Coverage Ratio loan is a loan that is granted based on the borrower’s DSCR. Lenders may require a minimum DSCR for a loan to be approved, and may also consider other factors such as the borrower’s credit score and the property’s value. DSCR loans are often used for commercial real estate purchases or refinancing.
- The Hometown Heroes program in Florida is a state program that offers discounts on home loans to certain first responders, military personnel, and other public servants. The program is designed to recognize and reward the service of these individuals, who often make sacrifices to protect and serve their communities. Eligible participants in the Hometown Heroes program include law enforcement officers, firefighters, emergency medical technicians (EMTs), paramedics, teachers, and military personnel. To qualify for the program, participants must be first-time homebuyers or have not owned a home in the past three years, and must meet certain income and credit requirements.
Home Buyer Mistake #2:
They didn’t factor in the property tax increase that happens when a property is reassessed upon new ownership. This is especially significant for a property that hasn’t sold for 10, 20 or 30 years as property taxes have a cap on how much they can increase. So a house that was bought for 320k that is now work 620k will have a significant property tax increase. A new homeowner will see a hefty bill at the end of the year or a large increase on the monthly mortgage if the increase isn’t considered.
Make sure to calculate your estimated property taxes and not just base your taxes off the previous owners tax history.
Home Buyer Mistake #3:
They didn’t ask for a seller concession to cover their out of pocket expenses at closing. Buyers can ask the sellers to cover their closing cost when presenting their offer. This will save the buyer 3-5% of the value of the purchase price in closing costs. This strategy back after a few years of the hot sellers market where asking for a seller concession was less favorable.
Home Buyer Mistake #4:
They didn’t look at multiple properties to compare before going under contract. We’re now in a market where buyers have less competition and can take their time with their home purchase. I suggest seeing multiple properties before offering on a home. In my experience, this helps buyers gain so much confidence in their home buying decision. I had a buyer fall in love with the first house she saw and ask to put in an offer. I encouraged her to allow me to schedule a few more tours with her for the very next day. After seeing several more homes, she realized she could a much newer home in a better area for the same price. After just 4 days from her initial inquiry with us, she was under contract!
Home Buyer Mistake #5:
They didn’t purchase a property that they could also use as a short or long term rental if something happens down the road. Many zoning laws and HOA restrictions prevent homeowners from renting properties out at their own discretion. I personally feel it’s smart to buy a property with as little restrictions as possible. EVEN IF you’re planning on living in it as a primary residence. Life happens and plans change.
Don't Make these 5 home buyer mistakes..
Work with our team of experienced real estate professionals! We are dedicated to helping you every step of the way. We pride ourselves on our excellent customer service and our ability to get you the best deal possible. Whether you’re a first-time homebuyer or a seasoned investor, we’ve got you covered.
Here, our buyers can find a full First Time Home Buyers Guide, which walks them through every step of the process from start to finish. We want to make sure our buyers are not only implementing the right strategies, but they learn the process along the way. It is our hope, this isn’t their only real estate purchase.