For Buyers
10 Mistakes Buyers Make
1. Not committing to one agent
Playing the field and using several agents at the same time might
seem like a good idea, but you must realize that all agents have
the same MLS listing inventory to show you. Using several agents
at the same time is usually a waste of your time.
2. Not signing Buyer Representation Agreement
In Idaho, you are not considered a client until you enter into
a written Buyer Representation Agreement with your agent. That
means you are merely a “customer” and not entitled
to client level representation. Most competent, successful agents
will require that you enter into a Buyer Representation Agreement
before devoting serious effort to finding the right property for
you.
3. Not understanding agency
relationships
Many buyers do not understand the consequences of buying a home
from a listing agent. The listing agents’ first loyalty
is to their seller. When you buy a property from the listing agent,
the best you can hope for is limited dual agency representation
where the agent represents both the seller and the buyer with
no advocacy for either party. You should be sure that you clearly
understand who your agent represents. A buyer’s agent will
represent you and only you, unless you authorize the agent to
become a limited dual agent while purchasing a property listed
by their broker.
4. Using an inexperienced
agent
There are more than 4,700 real estate agents in our local MLS,
many of whom are brand-new. Do you really want to entrust the
purchase of your most valuable asset to an agent who is new and
may have handled only a few transactions?
5. Using an agent who is a friend or a
relative
Using an agent who is a friend or a relative opens you up to many
potentially difficult situations, including possible discomfort
over disclosing personal financial information and other sensitive
aspects of the transaction. It is usually not a good idea to mix
family or friendship with business.
6. Not getting financing pre-approved
Proof of your ability to obtain financing is often a
critical issue when a seller considers whether to accept your
offer vs. another offer. It is always best to get totally approved
for your financing before shopping for a home to avoid looking
at homes you may not be able to afford, and also to be able to
demonstrate to the seller that you can obtain the necessary financing.
7. Making lowball offers
Making an offer that is substantially below fair market value
is a sure fire way to ensure that you won’t get the home
you want. Many sellers will be insulted by such an offer and may
not counteroffer; thereby ensuring that you will not get the home.
It is usually best to have your agent research the true market
value of the property and make a reasonable offer.
8. Making contingent offers
Most sellers will not accept an offer that is contingent upon
selling your present home. Despite the difficulty, it is usually
best to sell your present home before making an offer to purchase
your next home. You may want to consider arranging bridge financing
so you can make a firm offer, or at least have your present home
sold and in escrow to make your offer more attractive to the seller.
9. Not getting a home inspection
You might think that you know if the home you want to buy is in
good condition, but a thorough home inspection is always a good
idea. A competent home inspector will check out all of the major
systems of the home and tell you which items may need attention.
10. Not determining seller’s motivation
before making an offer
It is always a good idea to try and determine why a seller is
selling. This may be difficult, but if you can learn the seller’s
motivation, you may be able to structure your offer to be more
acceptable than competing offers.
