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Casual Articles - The Eight Biggest Mistakes Buyers Make in Real Estate (and How to Avoid Them)
John Wanamaker, a 19th century entrepreneur, once famously made the statement, “I know that half of my advertising is wasted, I just don’t know which half.” Fortunately for today’s marketers, there are scientific ways to determine which half is wasted, and which half is not, through the use of common direct marketing measurements.Advertising is, and has always been, part art and part science. With direct marketing, the science part takes center stage as there are common direct marketing measurements that can be utilized to verify the results of the advertising.With the increased popularity of direct marketing, the success of advertising can be measured through a variety of common direct marketing methods such as cost per acquisition, cost per piece, and response rate.Before continuing in describing these common direct marketing measurements in detail, it is beneficial to review one of the direct marketing tools needed to determine the success of the mailing. The most important direct marketing tool is the response mechanism. This is how you can gauge the success, or lack of success, of a direct mail campaign. This is the mechanism by which the prospect will use to respond - it may be a postcard to request more information, an 800 number to call, or a website address to place an order. You can than utilize this response to determine the success of the direct mailing.The first of the most common direct marketing measurements is the cost per a
Just like the jolly guy in the furry red suit. Make a list and check it twice (and then stick with it).
Mistake #4. Not doing your homework on financing.
This mistake can cost your thousands of dollars, cause you to miss on the best properties, and potentially damage your credit rating.
A lot of potential buyers start the process by looking at homes while assuming they can get a loan. Sure, we like window shopping too but it's helpful to do some financial homework. Start by doing the basic math yourself using widely available online mortgage calculators, including the ones we feature on our website (on pages with property's details). You should also familiarize yourself with some financing basics.
Before you start to setup showings and view properties with an agent, it's smart
Before becoming a netpreneaur, I was an entrepreneur. First, I owned a successful child care center which grew to capacity in less than two years. When I sold that, I bought a little flower shop that had less than 300 customers and grew it to what it is today, one of the most successful, award winning companies in South Florida with more than 7,000 customers who purchase from us on a regular business. To better serve our customers, we took our business to the Internet. We still have a brick and mortar storefront, yet everyday we receive more and more customers via the Internet.How about you? Do you or did you have a traditional business or professional practice? Is it successful? Unless you were born under the star called “LUCKY,” you probably did lots of planning. A business plan, a marketing plan, maybe even a succession plan for what to do with your business when you were through.You may have heard the statistics that half of all small businesses fail in their first year and of those, only 25% make it through to five years. According to youngbiz.com it can be even less for e-businesses.Build it and they will come! Not! You can have a terrific site, with lots of bells and whistles and if people don’t know you exist, you never get any visitors, let alone customers.Planning is the key to success in business. Amazon.com had a plan, Bill Gates had a plan, eDiets had a plan, and I’ll bet they still do. Once a business launches on the net, you will n
Recently we interviewed people from our team as well as our colleagues at Boulder Creative Housing. We also reviewed some of what we've learned in real estate here in Boulder and from our real estate experience on Nantucket.
The result is the Eight Biggest Buyer Mistakes and How to Avoid Them. As always, feel free to contact us with any comments or questions. You can also reach me at 303.746.6896.
The Eight Biggest Buyer Mistakes (and How to Avoid Them)
Mistake #8. Skipping due diligence on location and community.
From the time it takes to commute to the quality of neighborhood schools, a lot of things can affect the enjoyment of your home that has little to do with the house itself. Will your property be impacted by the new transit oriented developments in Boulder and along the tech corridor?
Where is the nearest grocery store, post office, gas station, and city park? Is there a landfill or factory nearby that might affect the air or water quality? How close is the nearest EPA Toxic Waste Superfund site? Have you looked into the megan's law database for Colorado or contacted local authorities to check whether registered sex offenders might live nearby?
You can do a lot of research online, but community character is nearly impossible to accurately determine from a website. Yes, there are many resources on the Internet including this blog and a list of links and other resources we've collected. But that's not enough.
Before buying a home, you should invest the time to walk the neighborhood, talk to the neighbors, visit local schools, time your commute to work, and more. This kind of information is extremely valuable and may require several visits to the community. And it's well worth it if you want to be happy long term with the choice you're making.
Mistake #7. Not getting a building inspection.
Even if you are an expert carpenter with many years in the trades, we recommend a professional building inspection. In some cases (like established neighborhoods with mature trees between the house and the street which may be prone to root intrusions) we also recommend a sewer inspection with fiber optics/remote cameras. If there are signs of water damage or moisture in the home, we'll recommend a mold inspection as well. The upfront costs for inspection can start as low as $250 and it's cheap peace of mind.
Mistake #6. Overpaying for a property.
In Boulder and surrounding communities, many buyers are from out of state and compared to their home city, our local real estate can look like a tremendous bargain. Often sellers will toss out a high price to gauge the market. This also sometimes happens because the sellers chose a agent based on the highest comparative market analysis, and they'll need some time to adjust to market reality.
Smart shoppers will ask their agent for a list of compables before viewing homes and for more specific comparables before putting in an offer. Even unrealistic sellers have been known to come back to reality when confronted with well documented comparable sales. What else has sold in the past few months that is similar to this property? What is currently on the market that matches this property's characteristics?
Only put in an offer after reviewing comparables and knowing the market. This step can save you thousands of dollars. It's also something a good buyers' agent should be able to prepare for you.
Mistake #5. Compromising on your property requirements.
We ask our clients to take the time to prepare a list of "must have" features in a home. Based on these criteria and their chosen location, we'll set clients up with emailed alerts of modified listings and newly listed properties as they come to market. This is the most efficient way to get listings that fit a client's needs.
Most websites feature property that is days or months old. An MLS driven listing alert system is efficient and, when properly set-up, can save you countless hours cruising the internet.
But browsing the Internet is fun and we'll sometimes have clients call to setup showings for homes found online which don't have all their "must haves" features. If a client happens to fall in love and purchase it, it's likely down the road that the missing "must have" feature will start to bug them.
Just like the jolly guy in the furry red suit. Make a list and check it twice (and then stick with it).
Mistake #4. Not doing your homework on financing.
This mistake can cost your thousands of dollars, cause you to miss on the best properties, and potentially damage your credit rating.
A lot of potential buyers start the process by looking at homes while assuming they can get a loan. Sure, we like window shopping too but it's helpful to do some financial homework. Start by doing the basic math yourself using widely available online mortgage calculators, including the ones we feature on our website (on pages with property's details). You should also familiarize yourself with some financing basics.
Before you start to setup showings and view properties with an agent, it's smart t
Did you notice the title for this article?Of course, it's a headline. That's right and it uses a shop-worn classic format which still continues to amaze me with its power. Just 2 simple words..."How To..." Stick with me on this, I know it sounds too easy.The simple, lowly "How to" headline is still tops in my book for simplicity and effectiveness. You really cannot go wrong with it. The 'how to' headline is so versatile. You can follow it with several benefits, a question, an offer, almost anything - and it works great!In fact, using the 'how to' formula is one of the best places to start when writing headlines because it forces you to think of what your product/service actually does for the person.Here are a couple of winning examples to get your juices flowing:How to Collect from Social Security at Any AgeHow To Get FIVE Money-Making Web Sites In 29 Minutes Or Less...Without Spending A Fortune!How to avoid the biggest mistake you can make in building or buying a homeHow to cruise the world for $19 a dayHow to get Enthusiastic Applause - Even a Standing Ovation - Every Time You Speak (Ted Nicholas)How To Win Friends And Influence PeopleHow to make your car invisible to radar and laser!How to make your computer as easy to use as your telephoneHow to fix carsCheck out the last winning headline on our list - "how to fix cars". I mean it really can't get any simpler than tha
You can do a lot of research online, but community character is nearly impossible to accurately determine from a website. Yes, there are many resources on the Internet including this blog and a list of links and other resources we've collected. But that's not enough.
Before buying a home, you should invest the time to walk the neighborhood, talk to the neighbors, visit local schools, time your commute to work, and more. This kind of information is extremely valuable and may require several visits to the community. And it's well worth it if you want to be happy long term with the choice you're making.
Mistake #7. Not getting a building inspection.
Even if you are an expert carpenter with many years in the trades, we recommend a professional building inspection. In some cases (like established neighborhoods with mature trees between the house and the street which may be prone to root intrusions) we also recommend a sewer inspection with fiber optics/remote cameras. If there are signs of water damage or moisture in the home, we'll recommend a mold inspection as well. The upfront costs for inspection can start as low as $250 and it's cheap peace of mind.
Mistake #6. Overpaying for a property.
In Boulder and surrounding communities, many buyers are from out of state and compared to their home city, our local real estate can look like a tremendous bargain. Often sellers will toss out a high price to gauge the market. This also sometimes happens because the sellers chose a agent based on the highest comparative market analysis, and they'll need some time to adjust to market reality.
Smart shoppers will ask their agent for a list of compables before viewing homes and for more specific comparables before putting in an offer. Even unrealistic sellers have been known to come back to reality when confronted with well documented comparable sales. What else has sold in the past few months that is similar to this property? What is currently on the market that matches this property's characteristics?
Only put in an offer after reviewing comparables and knowing the market. This step can save you thousands of dollars. It's also something a good buyers' agent should be able to prepare for you.
Mistake #5. Compromising on your property requirements.
We ask our clients to take the time to prepare a list of "must have" features in a home. Based on these criteria and their chosen location, we'll set clients up with emailed alerts of modified listings and newly listed properties as they come to market. This is the most efficient way to get listings that fit a client's needs.
Most websites feature property that is days or months old. An MLS driven listing alert system is efficient and, when properly set-up, can save you countless hours cruising the internet.
But browsing the Internet is fun and we'll sometimes have clients call to setup showings for homes found online which don't have all their "must haves" features. If a client happens to fall in love and purchase it, it's likely down the road that the missing "must have" feature will start to bug them.
Just like the jolly guy in the furry red suit. Make a list and check it twice (and then stick with it).
Mistake #4. Not doing your homework on financing.
This mistake can cost your thousands of dollars, cause you to miss on the best properties, and potentially damage your credit rating.
A lot of potential buyers start the process by looking at homes while assuming they can get a loan. Sure, we like window shopping too but it's helpful to do some financial homework. Start by doing the basic math yourself using widely available online mortgage calculators, including the ones we feature on our website (on pages with property's details). You should also familiarize yourself with some financing basics.
Before you start to setup showings and view properties with an agent, it's smart
Whether you love them or hate them, at some point in our lives, all of us have to go through the dreaded job search. Have you noticed how difficult it becomes finding work as you get older too? I found myself unemployed at 39 and thought I’d walk into another job within a couple of weeks. Well, there were plenty of vacancies around but despite my carefully prepared resume and well written cover letter, I got but 1 reply to 25 applications over a 3 month period and that was just a simple thanks but no thanks.Of course, this was a good few years ago now and the medium for finding new work was via the employment agencies, the local rags, or word by mouth. It’s so much different these days with the opportunities unveiled with that information super highway. I could have done with a bit of electronic assistance back when I was out of work. It’s so much faster than the postal service and much easier to research and follow up too.Despite this, a job search is still seen as a necessary evil to many folks. A painful and humiliating process that makes them despise themselves with each rejection or ignored application. There are some people, however, that love a good job search. Some employment seekers just can’t resist bouncing in and out of different jobs and positions, as they continue setting themselves up for new challenges and or promotions. It is possible to take the sting, the monotony, and the fear out of a job search. Here are a few suggestions on turning
Mistake #6. Overpaying for a property.
In Boulder and surrounding communities, many buyers are from out of state and compared to their home city, our local real estate can look like a tremendous bargain. Often sellers will toss out a high price to gauge the market. This also sometimes happens because the sellers chose a agent based on the highest comparative market analysis, and they'll need some time to adjust to market reality.
Smart shoppers will ask their agent for a list of compables before viewing homes and for more specific comparables before putting in an offer. Even unrealistic sellers have been known to come back to reality when confronted with well documented comparable sales. What else has sold in the past few months that is similar to this property? What is currently on the market that matches this property's characteristics?
Only put in an offer after reviewing comparables and knowing the market. This step can save you thousands of dollars. It's also something a good buyers' agent should be able to prepare for you.
Mistake #5. Compromising on your property requirements.
We ask our clients to take the time to prepare a list of "must have" features in a home. Based on these criteria and their chosen location, we'll set clients up with emailed alerts of modified listings and newly listed properties as they come to market. This is the most efficient way to get listings that fit a client's needs.
Most websites feature property that is days or months old. An MLS driven listing alert system is efficient and, when properly set-up, can save you countless hours cruising the internet.
But browsing the Internet is fun and we'll sometimes have clients call to setup showings for homes found online which don't have all their "must haves" features. If a client happens to fall in love and purchase it, it's likely down the road that the missing "must have" feature will start to bug them.
Just like the jolly guy in the furry red suit. Make a list and check it twice (and then stick with it).
Mistake #4. Not doing your homework on financing.
This mistake can cost your thousands of dollars, cause you to miss on the best properties, and potentially damage your credit rating.
A lot of potential buyers start the process by looking at homes while assuming they can get a loan. Sure, we like window shopping too but it's helpful to do some financial homework. Start by doing the basic math yourself using widely available online mortgage calculators, including the ones we feature on our website (on pages with property's details). You should also familiarize yourself with some financing basics.
Before you start to setup showings and view properties with an agent, it's smart
Health insurance is designed to offer financial protection against losses experienced due to illness, accidents, or injury. This type of insurance comes in many forms that offer differing levels of coverage. It can be purchased as part of a group policy or may be purchased by an individual.Group policies are generally purchased through an employer, associations, or unions. They may be less expensive because the costs associated with administration are reduced. In addition, the employees or association may pay part of the premium.Group health insurance has become an incentive for potential employees who are trying to cover their or their families' health care expenses. Some policies offer managed care. Depending on the policies of a managed care provider, preventative health care may be part of the plan. Preventative measures may include regular checkups.Individuals may purchase individual health insurance polices in the absence of company provided benefits or if they are self-employed. Generally individual health plans can be more expensive, however, they also have some benefits.For example, individual policies can be customized for your specific needs. Shopping around for health insurance can be helpful by allowing you to compare the benefits and cost of different types of coverage. Consulting with caring agents will help you determine the policy that is best for you and what level of coverage you'll need.You may be able to save money on t
Only put in an offer after reviewing comparables and knowing the market. This step can save you thousands of dollars. It's also something a good buyers' agent should be able to prepare for you.
Mistake #5. Compromising on your property requirements.
We ask our clients to take the time to prepare a list of "must have" features in a home. Based on these criteria and their chosen location, we'll set clients up with emailed alerts of modified listings and newly listed properties as they come to market. This is the most efficient way to get listings that fit a client's needs.
Most websites feature property that is days or months old. An MLS driven listing alert system is efficient and, when properly set-up, can save you countless hours cruising the internet.
But browsing the Internet is fun and we'll sometimes have clients call to setup showings for homes found online which don't have all their "must haves" features. If a client happens to fall in love and purchase it, it's likely down the road that the missing "must have" feature will start to bug them.
Just like the jolly guy in the furry red suit. Make a list and check it twice (and then stick with it).
Mistake #4. Not doing your homework on financing.
This mistake can cost your thousands of dollars, cause you to miss on the best properties, and potentially damage your credit rating.
A lot of potential buyers start the process by looking at homes while assuming they can get a loan. Sure, we like window shopping too but it's helpful to do some financial homework. Start by doing the basic math yourself using widely available online mortgage calculators, including the ones we feature on our website (on pages with property's details). You should also familiarize yourself with some financing basics.
Before you start to setup showings and view properties with an agent, it's smart
Healthy kids for the most part are dependant on their parent's ability to lead by example and provide a healthy home life with a variety of situations. It's through these varied life experiences that children learn to develop the self confidence, independence and interdependence on others outside their direct family.There are many causes of separation anxiety in children. I won't say that anything in regards to children is easy or can be broken down into a set of rules that work with every child. Each is different and as a parent of 8 with 4 adopted at various ages, our family knows first hand that what works for one child doesn't necessarily work for another.That said, one thing what has served our family well is consistency whenever possible. Children are not born with a sense of major attachment but more with a sense of wanting to be secure. You can see readily see this in babies. While many new parents may not want to be away from their newborn babies, it's important to realize even they need to begin to develop ways to interact with others. It's only through the experience of being with other people can be skills be learned. Once again, parents can go a long way in developing mentally healthy infants and children if only by their attitude in a given circumstance.With my children, it was important to make certain that they couldn't manipulate the situation when my husband and I decided to have a night out. All fits of crying and acting out
Just like the jolly guy in the furry red suit. Make a list and check it twice (and then stick with it).
Mistake #4. Not doing your homework on financing.
This mistake can cost your thousands of dollars, cause you to miss on the best properties, and potentially damage your credit rating.
A lot of potential buyers start the process by looking at homes while assuming they can get a loan. Sure, we like window shopping too but it's helpful to do some financial homework. Start by doing the basic math yourself using widely available online mortgage calculators, including the ones we feature on our website (on pages with property's details). You should also familiarize yourself with some financing basics.
Before you start to setup showings and view properties with an agent, it's smart to consult with a reputable lender and confirm your financial plans. You'll find out how much house you can comfortably afford based on currently available loan programs. Importantly, after the initial consultation, good lenders will also be available to provide a prequalification letter matching any offer you might make - a critical element in strengthening an offer.
We always recommend clients check out several lenders and available loans because mortgages are largely commodity products. The right loan for you could be an ARM, a fixed rate mortgage, cross collateralization with another property, or a plain vanilla FRM.
Good lenders can help you find the best loan for your specific situation. A lender with access to the best programs can save you thousands of dollars over the life of your loan. Even when putting together an offer, a good lender can help structuring the financing of your offer strategically and even help you present a stronger offer with a lower purchase price.
Sadly, buyers typically do little due diligence with lenders.
Mistake #3. Not seeing past cosmetics and following first impressions.
Sometimes the best deals simply don't show well. Maybe there are obvious visible blemishes or too much clutter. The dishes may not be washed. Walls may need to be painted and doors rehung. Maybe the basement even smells like cat urine.
To point, this week we closed on a house that was at least 10% under market value. When we first saw this house it was a mess. There was mud on all the floors. Boxes were everywhere from the tenant that was evicted. The backyard was filled with junk. And yes, there was actual critter droppings of some sort in one corner of the basement. In a single word, the property was Nasty!
Luckily, my buyers had vision. Through an inspection resolution we negotiated, the whole house was cleaned from top to bottom. There are no leftover tenant belongings. The yard is clean. All the walls freshly painted. The kitchen was even recaulked and the smell is gone. The house looks like its true market value now and the buyer, who I represented, saw beyond all the cosmetic issues and literally saved himself thousands.
Mistake #2. Trying to deal with the seller directly.
The allure of contacting a seller directly is strong and without knowing much about the real estate, I probably would have once been tempted to make this common mistake as well. The idea most people have is that if they call the agent or owner directly, they'll save on the real estate commissions.
Oops. This is not usually how it happens. If the home is listed, the owner will probably refer you to their agent because (by the contract they've made) even if they do all the work, they'll most likely still owe that agent a commission. Although certain sellers FSBO their property, they nearly always offer a buyers agent commission. If you negotiate directly with a FSBO without an agent, they'll try their hardest to pocket the commission themselves. After all, that's why they are FSBOing in the first place. It's not to save you money. Also in this situation, you have no representation or guidance through the process and your earnest money (and more) could be at risk.
In the worst case scenario, call the name off the sign or advertisement and you'll be dealing with a sellers agent. This person doesn't represent you or your interests at all but still collects the buyers/transaction agent and listing agent commission. In this situation too, you have nobody on your side negotiating and watching out for your interests.
Can you save money? Perhaps. It is possible to catch something before it hits the market. And with one notable $4MM exception, my experience is most FSBO sellers have an inflated sense of what their home is worth.
Top executives and others who deal with large transactions nearly always hire agents to negotiate when dealing with personal matters. Why? It's not because they aren't capable of expert negotiation in behalf of their clients or company. They do this kind of thing everyday, but they choose agents to go to bat when their personal interests are involved because negotiating directly in these circumstances rarely results in the best
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