The market is challenging in Metro Detroit, and unfortunately, I have a list of the biggest mistakes home buyers make today. Let’s find out how to avoid them. 🤩
Let’s Find Out How to Avoid Mistakes Home Buyers Make Today
Buying a home is challenging in any market, and today’s market in Metro Detroit is no exception. With higher mortgage rates, rising prices, and a limited supply of homes for sale, there’s a lot to consider. To avoid pitfalls, take the time to find the right agent. Start by visiting their website to see their content. Question their knowledge and education style. As a home buyer, understanding the process is crucial. Can they explain it so you can make informed decisions? Interview them with questions about home prices, the housing market, mortgage mistakes to avoid, and negotiating with a lender. Don’t just listen to what they say; ask for graphs, trends, or documentation to back up their opinions. An expert’s insights will help you avoid common mistakes home buyers make today.
Mistake Home Buyers Make #1: Putting Off Pre-Approval
First, you need to understand how mortgage rates are determined. Every day I post a blog titled “Today’s Mortgage Rate: What’s Causing the Change.” Did you know you can predict where mortgage rates are going? I’ll show you how. Once you understand the trends, you can negotiate and spot a good lender. Getting pre-approved should be your first step in the home-buying process. A lender looks at your finances to determine how much they’re willing to loan you for a mortgage. This helps you understand your budget before you start house hunting in Metro Detroit. While looking at homes is more exciting than talking finances, don’t skip pre-approval. As CNET explains:
“If you wait to get preapproved until the last minute, you might scramble to contact a lender and miss the opportunity to put a bid on a home.”
Mortgage Daily News Compare Rate Examples
As you scroll through the various lenders, look at how the Mortgage Rate changes depending on your credit score, down payment, lender fees, and points. Some lenders are better than others. For an example of a rate, visit Mortgage Daily News, change the loan amount, FICO Score, and Zip Code, and review rates. Today’s Mortgage Rates: What’s Driving the Change will have more details and a better explanation, updated lenders to compare rate examples, and updated daily.
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Mistake Home Buyers Make #2: Holding Out for Perfection
Don’t get too caught up in the “eye candy” when looking for your new home in Metro Detroit. You might have a long list of must-haves and nice-to-haves, but be realistic about your home search. Finding a home that checks every box is ideal but unlikely, especially with low inventory. Plus, the perfect home may be too expensive. Investopedia advises:
“When you expect to find the perfect home, you could prolong the home-buying process by holding out for something better. Or you could end up paying more for a home just because it meets all your needs.”
Instead, look for a home with most of your must-haves and good bones, where you can change or add anything else you need later. It’s helpful to compare what homes are selling for move-in ready with all your wants. Then check your budget. You may have to rethink the must-haves vs. the wants. Is a larger home ready for improvements, or is something smaller and done more important? I recommend looking up sold data and starting to build your list.
Find Out What Homes are Selling For By City
Macomb County Sold Home Prices
Oakland County Sold Home Prices
Mistakes Home Buyers Make #3: Don’t Be House Poor
Now that you have an idea of current home prices in Metro Detroit and feel comfortable with your budget, the next step is to verify your home purchasing power in two ways: with a lower price and higher mortgage rate and with higher prices and lower mortgage rates.
Property taxes are part of your budget, and depending on the area, there could be a huge difference in your monthly payment based on property taxes. Here is a Michigan Millage Tax Rate. Contact the municipality and ask for the Accessors office; they can also tell you the millage rate by school district. The formula goes like this: The purchase price of the house ➗ 2 = X. Now take X and times that by the millage rate and ➗ 12 and add that to your monthly payment. Your initial payment will be lower until the municipality gets notified of the new owners and updates the home’s value. If you would like more clarification, give me a call at 248-343-2459. Taxes bills go out in June and November. Work the higher taxes into your budget; you’ll thank me later.
Next, contact several homeowner insurance companies to get bundle quotes for home and auto insurance for a rough estimate. Use the graphs in the carousel to determine your principal and interest, then add taxes and insurance to see if you’re still within budget or if you need to make adjustments.
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With today’s mortgage rates and home prices, buying a home is expensive. It might be tempting to stretch your finances to get the house you want, but avoid overextending your budget. Don’t forget to add the fun things you enjoy to your budget, like vacations and hobbies. It’s crucial to nail down your mortgage payment within reason based on needs, not wants. Bankrate advises:
“If you wait to get preapproved until the last minute, you might be scrambling to contact a lender and miss the opportunity to put a bid on a home.”
Not Working with an Expert Buyer’s Agent
This point might be the most crucial of all. Buying a home involves numerous steps, paperwork, and negotiations. Instead of handling everything on your own, having a professional agent by your side is a wise decision. The right agent will alleviate your stress and ensure a smoother process. As CNET explains:
“Attempting to buy a home without a real estate agent makes the process more arduous than it needs to be. A real estate agent can provide you with professional legal guidance, market expertise, and support, which will save you time, money, and stress. They can also increase your chances of finding the right home, so you don’t have to spend hours scouring the internet for listings.”
Take the time to interview different agents, and don’t just pick the first one you find online because you saw a house you like. Find your agent first, then start looking for your new home.
Final Thoughts
Mistakes can cost you time, frustration, and money. If you’re looking to buy a home in today’s market, having a professional can help you avoid these pitfalls. Let’s connect to ensure a smooth and successful home-buying experience.
Schedule a Buyer’s Consultation
That’s a lot to take in 🤩 Ready to explore the market and find your perfect home? Schedule a Zoom call with me, and we’ll review the sold data, understand your purchasing power and property taxes, and answer your questions and concerns. I’ll share my screen to give you a clear view of the market insights and help you make informed decisions. If you need to sell first, visit Top 3 Home Selling Questions Answered. I’ll walk you through Step #1. Find what your home is worth in today’s market and your equity gains.
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