Learn From This First Time Buyer’s Experience!
August 5th, 2009 categories: For Buyers, Mortgages & Financing
Brendt Montgomery has his 15 minutes of fame! Unfortunately, it may not be the way he wanted to get it. Brendt volunteered his story for a recent Wall Street Journal article about mistakes that can be made by first time buyers not doing homework or rushing into a sale. The entire article is worth reading, even if you are a seasoned buyer.
“Luckily, there was a contractual loophole: His parents rescinded the down payment money that they were gifting him, so he no longer qualified for a mortgage. The agents involved didn’t press for the commission, but he lost his deposit.”
CLICK HERE TO READ THE WALL STREET JOURNAL ARTICLE
Not mentioned in the article, but important to consider, is the belief that if a buyer can only find a “distressed” property, a great buy shall be had. This may or may not be true, consider these thoughts.
1. Compare any property to the relevant active, pending and sold listings to determine if the price you are paying is appropriate.
2. Always have a home or apartment inspected by a professional inspector. Given the magnitude of the sums involved in real estate purchases, it is always, did I say always, a good idea to hire a qualified home inspector. If nothing is found you can sleep better when you move in, if there are issues, whether or not a seller will repair them, at least you will know what you are getting and can plan to deal with the problems. Paragraph C-51 of the Hawaii Association of Realtors Purchase Contract, allows the buyer a period to inspect the property and if the buyer becomes uncomfortable with buying the property, they may cancel the deal during this time frame and get their deposit back.
3. Distress properties can be very good buys and I have seen buyers get terrific purchases through properties that are not distressed. Again, take each property on its own merit, do your research and make you offer based on your estimate of the home’s market value. Just because it is a foreclosure, REO, bankruptcy, sheriff’s sale or some other form of distressed property, don’t assume it is a great deal.
4. Determine your ability and desire to fix things. If you aren’t handy and don’t have weekends and evenings to work on your home, you will be better off buying a house that requires no work. Remember, many distressed properties were not well taken care of by the previous owner and could require a great deal of work.
If you would like to discuss your real estate needs, feel free to call me at 808-737-2093 or toll free at 877-737-2093. You can email me at keahi@lava.net.
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