Estimated read time: 4-5 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
There are some really good ways to hinder your ability to buy a home. Here are a few:
1. Rack up tens or even hundreds of thousands of dollars in student debt.
If you don’t really want to buy a home anytime soon, this is one way to do it. Student debt is crushing people who would otherwise be home buyers. Lenders factor in every single element of debt that you have on your record and student debt is no exception.
Real estate agents from LDSAgents.com frequently hear from young people who are anywhere from $30,000 to, yes, $450,000 in debt. In some cases, one’s monthly student debt payments can exceed one’s monthly income!
Parents, you can get caught up in this too and mess up your own credit. So, be very careful. It might be better for a student to work for a year rather than incur massive debt.
2. Put off getting “pre-approved” for a home loan until the last minute.
Since the mortgage “crisis”, only clients who get pre-approved for a loan in advance of making an offer are taken seriously. If you want to go to the end of the bidding line, this is the way to do it. The antidote: Take your agent’s advice and get preapproved early.
3. Ignore advice from your experienced real estate agent and, instead, listen to Uncle Wally, who has not purchased a home in 30 years.
With all of the complexities that have occurred in the real estate and home loan markets since the “mortgage crisis,” it is surprising how many people allow themselves to be “coached” by friends and relatives who claim they know more than the agents and lenders.
Recently, a young husband and wife were trying to buy a home in a very expensive part of California. Their agent found them what was probably the only home they could afford, and it had multiple bids on it. Back home in Utah, “Uncle Wally” got involved (even though he had no clue about the local market) and convinced the young couple that their agent was misleading them in order to earn a higher commission. Short story, they lost the home and ultimately ended up renting. That home has appreciated considerably in a short time and they are still in a rental.
The moral of the story is that a good lender and a local real estate agent will frequently be able to help you negotiate a better deal than Uncle Wally can.
4. Call a listing agent or a new home builder. Don’t bother having your own “buyer’s agent” to assist you.
If you are ok with spending an extra ten to $30,000, this is a good way to do it.
Consider these two facts:
First, an agent who lists a home for sale always represents the seller, not the buyer. This is the law. If, for instance, you call and work with an agent whose name you see on a "For Sale" sign, you will not have representation from that agent. That agent’s loyalty has to be to the seller.
Second, if you sign in at a builder’s model without an agent, you will not have representation. The builder’s salesperson represents only the builder and you will generally not be able to bring your own agent in after the fact, even if you want to.
Good agents should more than pay for themselves. They know local property values and they can often obtain more amenities for you with a builder than you can obtain for yourself. Take your own agent with you anytime you speak with a listing agent or visit a new home builder’s office.
5. You can also hurt yourself by assuming that buying a “For Sale by Owner” will save you money.
Let’s keep this short and sweet: The purpose of a “FSBO” (For Sale by Owner) is to make more money for the seller. It is not to save money for the buyer. Again, if you want to negotiate a better deal, take an agent with you.
6. Run up your credit card bill right before closing on your home.
Many people are unaware that lenders will check your credit right up to minutes before you close on your home. If they see a large credit card purchase, say, for furniture, they will re-calculate your credit score and you could be denied the loan that you thought was approved.
Since 2001, the percentage of people using an agent to buy a home has actually increased from 69 to 87 percent. To reduce the stress of home-buying and find an agent who “speaks your language,” visit LDSAgents.com. It’s a free nationwide service.
