Mistakes happen, even in real estate. Although it may be one of the biggest investments a person can make, both buyers and sellers can and do make mistakes. Take some time to learn from the mistakes of others so you can avoid them in your own real estate journey.
Picking the Wrong Location
For many buyers out there, buying a home or property can come with a lot of forgiveness. When a buyer is in love, they have the uncanny ability to forgive a property’s perceived faults. Noise? Forgiven. Bad location? Forgiven. Not enough amenities? Forgiven. One of the most important and key rules to buying a home is ensuring the location is right.
For some buyers, who may be up against a crazy market or have economic reasons for looking in a specific area, the luxury of finding the perfect home in the perfect location is not feasible. For others, especially those that are not in a rush to find a new home, they can take time to map out their prime location and wait for that perfect property to appear on the market. Don’t fall victim to the mistake of not buying in the area you want to live in – it could end up costing you in the long run.
Buying Sight Unseen
The pandemic created a need for buyers to rely on virtual tours and listing photos to really get the feeling for a property. And while open houses and in-person viewings have now become the norm again, there are many buyers that are still opting to buy sight unseen, especially in crazy real estate markets. Some buyers have had no issues with only relying on photos and tours; others haven’t been so lucky. The last thing you want is to end up with buyers remorse, living in a home you don’t actually want.
Another issue that’s become popular in areas with crazy markets is forgoing an inspection. As a buyer, you cannot depend on a seller to know all the issues with his/her property. Some cash buyers can afford to forego an inspection; others cannot. Mistakes happen, but you can 100% avoid buyers remorse by ensuring you actually visit the home you want to buy and make a point of having a proper inspection done. Even if it doesn’t change the terms of your contract, you’ll at least have an idea of what you’re getting yourself into with your new home.
Living in an HOA
Communities with HOAs can vary greatly in terms of the reach the HOA has over community members. While living in a community with an HOA can be great for people that want structure within their neighborhood, for others it can be a nightmare. If you’re the type of person that likes to control the color of your home’s exterior, park your car on the street, or even likes to keep your garbage cans on the side of your house, you could end up making a big mistake by buying a home in an HOA community. If you have your eye on a specific neighborhood or community and you know it has an HOA, review all rules and regulations before you buy.
Not Putting Enough Effort Into the Sale
Regardless of whether you live in a hot market or not, buyers love seeing a home at its best. A home that’s taken care of will undoubtedly have more interest and possibly more offers than one that isn’t. For sellers, putting effort into the sale can be as simple as ensuring your home is tidy and clutter free. For some buyers, seeing a home at its worst could impact whether they lowball their offer. Buyers like to get excited, and a mistake to avoid is failing to give buyers reasons to be excited to see your home.
Not Planning for Taxes
For many markets across North America, property values have steadily increased over the past few years, and owners who have been in their homes for decades are seeing huge profits when they sell. While homes and other types of property are not generally subject to normal sales tax, if you see a large return on your sale you may be subject to other taxes like capital-gains taxes. Exemptions and reductions are available but rely on certain factors being met, so it’s not a guarantee you’ll be able to avoid tax on your sale. Don’t make the mistake of assuming you won’t have to pay taxes – it’s best to get as much information as you can from a local expert as to whether you’ll be subject to taxes before you sell so you can prepare accordingly.
Not Being Upfront About Issues
No one wants to admit their home has or had issues, but for sellers, disclosing issues you know about is required by law. If you hide issues or work that has been done, or feign ignorance of the issue, it could come back to bite you in the future. Most residential sales in the US require some form of disclosure document (the law is different in Canada and province-specific). Specifically in the US, if you do not disclose certain items in the sale, and the new owners can prove that you knew about them, they have the right to litigation. When it comes time to sell, be as forthright as possible and work with your agent to disclose all necessary items to prevent any possible negative outcomes.
Buying and selling real estate can be a big task, especially for new buyers. But real estate is not a new thing – whether a newbie or seasoned veteran, learn from the mistakes of others to prevent any heartbreak, buyers remorse, or loss of funds.