Unique Original Articles » Eight Home Common Buying Mistakes and how to avoid them

Those looking at the figures of the housing market already know that we are in what is called by Texas Real Estate agents, euphemistically “tricky times”. There is a sense that the housing market has slowed down and that finding a property is tougher with a lot fewer bargains available. But it is also true that sales are still being made, people are still buying (and selling) Texas properties and Texas real estate agents are doing business (albeit in a much tougher environment).

All of this is all the more reason why you should, when it comes to making your dream purchase focus on what you should be doing so as to avoid making a mistake. Whether you are buying as an investment, a second home, a ranch, a lakefront property for the weekend or a main residence the Texas property rules apply equally:

1. When you are buying therefore make sure you’re not buying properties from those who bought at top-of-market prices. Thinking the bubble headlines were wrong or didn't apply to them, newbie real estate investors wanted to become weekend millionaires. These are now stuck with properties which are, out of necessity, highly priced and unrealistic in terms of the value they give you. To make sure you are getting the best value possible for the area check out similar properties using the handy Texas Property Search facility on our site or subscribe to one of our Texas Real Estate magazines and check out the property prices direction and the features of comparable properties.

2. Do not go for a Utilized Interest-Only Mortgage. Many home-hungry buyers discovered the only way you can pay top-of-market prices is to get an interest-only mortgage. With declining prices and no monthly principal payments, these homebuyers often find themselves fuelling the growing foreclosure market. Get a fixed rate mortgage and, if possible, make end-of-year lump sum payments to bring the mortgage repayment down.

3. Be alert for Overlooked Resale Characteristics (ORS). New construction was all the rage back in happy, easy-going 2005, everyone wanted to select finishes, floor coverings and kitchen cabinets. Those same buyers should beware when this year’s homebuyers become sellers, buyers could choose to bypass their resale for the chance to design their own new home. If you think you need advice try putting a post in our Texas Real Estate Forum. Frequented by professionals as well as seasoned buyers and sellers of Texas Property it can provide you with experienced, practical help free.

4. Never Skip Performing a Home Inspection. Before some markets shifted away from sellers markets, many homebuyers waived their right to a property inspection. Never, skip or waive the right to an inspection, the benefits far outweigh the costs and could save you numerous headaches and expenses later. Do not stint on who you are going to hire to do the Home Inspection either. Hire a qualified professional as they are then liable for anything they missed which means you legitimately minimize your own exposure.

5. Don’t misinterpreted developers’ give-aways. Two years free condominium assessments, stainless appliances and plasma tv's were thrown in to induce buyers to write contracts to purchase. What many buyers thought were a freebie were actually a signal that markets were softening and that projects were slow to sell from increased competition and a lack of buyers. Incentives are a band-aid for a languishing development and while the slowing home market may be a reason for this another one may be a general downturn in that particular area which leads either to property values dropping drastically (in which case you should benefit directly) or to the value of the area itself dropping as unsavory urban characteristics begin to develop.

6. Do not be one of those who were represented by the same agent representing the sellers. Thinking they might get a better deal or out of ignorance there are those who used the listing agent to represent them as well. Most states require written acceptance of this situation known as dual-agency by both parties under agent license laws. All buyers should be represented by an agent who has a fiduciary responsibility to them. Hire an Exclusive Buyers Agent who will be able to look out for your rights not work for both you and the seller.

7. Always Read Homeowners Association Documents. Getting rid of Fido because you didn't know you were moving into a no-dog building is an example why every buyer should request and read home owner association declarations, rules and regulations, association meeting minutes and budgets. Ask if there are any special assessments (typically for capital improvements; new roofs, windows, elevators) or planned ones. Special assessments can run into the thousands. Find out about area bylaws and how they affect you, check out to see if there is adequate provision for parking and whether what you are buying is a property that is free of general restrictions in terms of its normal use.

8. Never neglect to request rates of state, county or local transfer taxes paid by buyers at closing. Some buyers learn too late that they might need large amounts of extra money to pay transfer taxes in the state, county and city where they are purchasing a property. The state of Texas has special laws regarding surface rights, for instance and you should also know that transfer taxes which typically can't be financed can kill a transaction. Inquire when you start your search how much transfer taxes are and who pays them. Check out our special article on Texas land deeds and how they are different in the Lone Star state. Plus check out our 'What to Look for Before you Buy' article written by an expert in the field.

Always make sure you have done your homework carefully. You know, for instance, average prices in the area you are buying in. You have a list of must-haves for your property. You have subscribed to our Texas Property Alert which keeps you informed of all the latest bargains the moment they come in the market (and from which you can unsubscribe at any time), you have got an accredited Texas Realtor to purchase a property from and you have your financing deal in place, ready to go.
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