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Monday, September 8, 2014

4 Horrible Real Estate Mistakes to Avoid

Avoid costly mistakes. Ask a professional.
Most people make horrible mistakes simply based on a lack of knowledge. That means you can avoid mistakes by simply getting information from a credible source BEFORE you make decisions.

Here are four mistakes in real estate you can avoid by simply having a little information.

When Selling a Home

1) Don't hire just any agent to sell your house:
All real estate agents are not the same. You want to look for those who are familiar with your neighborhood and are top producers. Ask the agent how they plan to market your house, what you can do to make the place more attractive to prospects and how much you should ask. Don't simply choose an agent because they offer the lowest commission or give you the highest listing price.  After all, none of that matters if your home doesn't sell.

When Buying a Home

2) Don't skip a home inspection:
Failing to make your purchase contingent on a satisfactory home inspection could be a costly mistake. Independent home inspectors examine houses inside and out. They'll be able to tell you whether the roof or basement leaks, whether the mechanical systems are in good shape and how long the appliances should last. They can't report on things they can't see, but at least their trained eyes are better than yours and they are not emotionally attached to the home like you are. So don't pass just to save $300-$500; that's money well spent.

When Remodeling a Home

3) Don't fail to check out a remodeler:
Never, ever hire a contractor who knocks on your door or says his prices are good for only a few days. Reputable remodelers don't solicit door-to-door, and they don't cut prices just because they happen to be in your neighborhood. Check out a potential contractor thoroughly by calling several of his past clients, your local better business bureau, his bankers and suppliers, and your local consumer affairs agency.

If a contractor asks for more than a third of the contract price as a downpayment, chances are something's wrong. At worst, he's a scam artist who has no intention of returning after he cashes your check. At best, he's undercapitalized and can't afford to purchase materials on his own. Or, in between, he could be using your money to pay workers on another job. Never give a contractor cash, either.

TIP: Before you choose a remodeling project, consult a real estate professional.  Some projects increase resale value and some are just for your personal enjoyment. It's good to know which are which.

When Refinancing a Home (or Obtaining a New Mortgage)

4)  Don't grab the first low rate you see:
Promotional ads are designed to lure you in and there is often a lot of fine print. Make sure you know the terms of your current loan before you go shopping for a mortgage and take notes to compare at least three lender programs.

When purchasing a home, a good loan officer will help you find the best program based on the area and type of home you are looking to purchase in additional to your personal finances.

TIP: Occasionally, a slight boost in your credit or better debt ratios can get you a better loan.  Be sure to ask the lender if this applies to your situation.

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