Buying a home can be a very daunting task. Not only is this likely your most expensive investment, but the home buying process can have plenty of pit falls along the way. To help you avoid some of the common mistakes we’ll be breaking down the top 7 mistakes to avoid when buying a home in Roseburg Oregon!
Putting The Cart Before The Horse
To kick start our list, we have to start with what is oftentimes the most important step, and that’s getting pre-approved. Now I know this is something you’ve likely heard before, and many real estate agents won’t show you houses before you’re pre-approved, but there are several actual legitimate reasons to get approved before shopping.
The number one reason is that right now the Roseburg real estate market is just so darn competitive. If you want to buy a house, and there’s 5 offers to choose from, and your offer shows that you aren’t approved yet, I can guarantee we are likely at the bottom of that list.
Your real estate purchase requires several parts to the team. Your real estate agent, your lender, and yourself. And we all have to work together to make sure that you have a positive buying experience. Leaving one of those trusted advisors out of the picture until the last minute is never the right move and will only hurt your home buying experience in the long run, if it doesn’t completely cause you to miss out on the home you want to buy.
Educate Yourself (studying the market)
Next I want you to focus on studying the market. Whenever I get calls from you guys and you’re moving from out of area, most the time you are 6-12 months out or more, and I think that’s the perfect time for us to have the conversation of what you’re looking for so we can start to send some opportunities your way.
Now this isn’t because you’re going to buy anytime soon, heck, it may even be a year or more before you’re ready. But it’s so important to start to get a feel for the market, see what homes are going for, how fast, which neighborhoods, so that you truly know a good deal when you see it.
All markets are so vastly different and if you’re planning on making the long term investment of purchasing a home you want to know you’re making an educated decision, and this process usually starts months before purchasing a home.
Don’t Focus On Just The Deal
It’s important to remember that for most of us this is the house you’re going to be living in or raising your family. The house you end up deciding to buy you’re buying because it’s the right fit for you and your family. You’re not only buying the home you’re buying the lifestyle that goes along with it.
Sometimes we can get so caught up looking for a deal that we may miss out on the perfect home for your family. While I own a real estate investment company as well as my real estate sales company, and can appreciate a good deal, for most, a house is so much more than that. If this is a house you’re going to be living in long term we should be taking into consideration the neighborhood, and trajectory of values in that neighborhood, school district, and proximity to your work. Those are the items that will likely mean more to you then the $10,000 you saved moving on the wrong side of town right next to the railroad tracks. That $10,000 difference saved you $50 a month, and you’ll likely be wishing you would have bought something else.
Online Value (Zestimate)
I’ve got to mention this one for both my buyers and sellers out there. It’s a question I get often… “How accurate are the Zillow, Redfin, Trulia, or Realtor.com’s online estimate of value?“
I’ve seen it multiple 6 figures above the appraised value, and I’ve seen it 6 figures below the appraised value. The important thing to remember is that this is a computer generated number. It’s based off of the numbers of beds, baths, square feet, and area. The computer doesn’t take into consideration your granite countertops, open concept layout, beautiful view of the valley, and proximity to the country club and best elementary school. And because of that it can’t accurately determine the value of a home and shouldn’t be the basis of your offer, whether that’s higher or lower than the list price.
Some quick searching online of recently sold Roseburg homes will give you a good idea what a property is worth, and that’s what having a good real estate agent is for! Not to mention, if you’re following mistake #2 and studying the market and reviewing listings and local real estate activity, you’re going to be plenty smarter than those computer algorithms.
Lets not forget the CEO of Zillow, home of the frequently referenced zestimate, sold his own house more than 40% below what Zillow estimated it to be. Don’t believe me? Google it. Crazy I know!
Expecting Increase in Value
Now we’ve seen likely the best real estate market in history over the last few years. Record low interest rates, real estate prices appreciating twice as fast, and in the Roseburg area double digit percentage increases year after year.
And while you may not have expected me to say this, just because we’ve seen this increase in value year after year for 12 years now, and it seems to continue increasing in value faster year after year, there is no guarantee that you’re home is going to be worth more 6 months from now, a year from now, or even 5 years from now.
Make sure you’re not making a speculative purchase just on the sole reason that you can live there for a while and then sell it for more money next year, because there is no guarantee it’s going to work out that way.
Think Long Term
With all that being said, when thinking real estate think long term. When clients ask me about the Roseburg Oregon real estate market and what’s going to happen, the easiest answer is that I don’t know. Nobody knows. But we can make educated guesses. And if you’re worried about the value on your new Roseburg home there are a few things we need to take into consideration, before even deciding if buying a house is the right move for you right now.
For the folks who are thinking about buying but don’t know how long they’ll want to live in the house, may switch jobs and move to a new area, or are just testing the waters of a town, you likely shouldn’t be buying. My rule of thumb is if you’re thinking 2 years or less, you’re likely better off renting. And that’s just because you don’t know what the market is going to look like in that short of an amount of time, and I don’t want you caught holding the bag.
The other side of the spectrum is some are afraid of what the real estate market could do. If you’re planning on owning this house for 5+ years, it’s likely not going to matter, because real estate always builds it’s way back up and has proven to be a great investment over the long term. The other exception is if this is an investment property for you, and you’re going to be renting it out in 2 years when you move into your next house. That’s great! I am still buying properties as we speak I have another 3 units under contract to close next month, and that’s because anything I buy I know I’m going to be holding for the long term. I’m not afraid of what the value does tomorrow or the next day, because real estate historically has been a great long term investment and I plan on holding mine as long as possible.
Budgeting For Hidden Costs
And last but not least, budgeting for hidden costs. Before you even buy a house you’re going to have a decent sized investment up front. Think $400 for your home inspection, $900 for your appraisal, does the property have a well? Add another $400. Does it have a septic tank? Add another $700. That’s not to mention your earnest money deposit, down payment, or closing costs through your bank.
All of those things add up fast and can catch you by surprise if you aren’t having those conversations with your lender and real estate agent.
But this mistake goes even deeper, because the expenses don’t stop once you close on the house. You now have a roof, water heater, appliances, and HVAC system that all need to be replaced at various intervals during your home ownership, and can range from $1,000 for a water heater install, to $15,000 for a new roof. While home ownership is the largest creator of wealth for most Americans and has proven to be a great investment over time, it’s not right for everyone, and having some savings set aside will likely be a necessity for when those projects do come up.
Thanks so much for reading and watching our video 7 Mistakes To Avoid When Buying A Home in Roseburg Oregon! If you haven’t already make sure to subscribe to learn all about what it’s like living here in Roseburg Oregon. We’ll see you next time!