Protecting Your Rights As a Buyer

If you’re a new homebuyer looking to purchase a property, it’s easy to get caught in a bidding war on the property. One thing you should always remember is to make sure you don’t give up many of the common protections included in a purchase contract. You’ll come across many situations where homebuyers will bid outrageous offers with very few contingencies just to purchase a home.

If you try to buy property in a hot real estate market, many desperate homebuyers will give up several contingencies including inspection of the home, selling their existing house, and the appraisal of the property. While many foolish homebuyers use this strategy, you can bet they will encounter many problems and issues once they move into the house.

If the new buyer gives up his right to have the prospective home inspected, he or she will forfeit the ability to discover any defects in a property prior to moving in. Many buyers try to make themselves feel good about forfeiting any contingencies because they think it’s necessary to win a property. If you think you’re going to use this tactic, you better make sure you proceed cautiously and understand what you’re giving up and what could possibly occur. If there was an issue or defect with the roof of a property, you’ll be the sucker who will end up paying lots of money to repair it. If a home has a lot of termite damage, you’re going to have to spend several thousand dollars to repair it. If there’s a problem with the galvanized plumbing, you’ll need to replace it with an updated copper piping. The property you shelled out lots of money for will now cost you extra money to repair.

If you currently own a home and need to sell it before you can buy another one, you should definitely put your house on the market first prior to purchasing another one. Unless you have lots of money saved in the bank to purchase a home, you could be forced into a bad situation when you have two loans to pay on each month if you can’t get rid of your existing house. You may also be forced to take a lowball offer on your existing home because you feel the need to get rid of the property soon. You would be in a much better position by selling your existing home first. If you’re thinking you may be homeless because you don’t have a property to move into, you should know that you can also stay with family and friends during this transition time. Your real estate agent can also include a special clause in your sales contract giving you time to find another place. If you’re in a real estate market where the sellers are in control of the negotiations, you’ll be in a strong position to negotiate what you want.

One strategy that is not recommended by real estate professionals is when a buyer is willing to enter into a purchase agreement with the seller without it being contingent on an appraisal. This foolish act is just about as terrible as giving a signed blank check over to the sellers. If you have a lot of money, this strategy could work for you. However, most people can’t afford to overpay on a property. For example, if a buyer discovers that he is bidding in a competitive market, he may offer more than the property is worth. The homebuyer will also be shocked to learn that the bank will only loan a certain amount of the value of the property and the buyer must then find additional sources for funds to cover the difference.

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