10 Common Mistakes Home Buyers Make Without a REALTOR®

One of the most important things a buyer should understand is who represents whom in the transaction. The agent marketing the property may represent the seller, depending on the agency relationships established in the transaction.

Buyers should understand the agent's role before sharing negotiating strategy, financial limits, urgency to purchase or other information that could affect their negotiating position.

The asking price is not necessarily the property's market value. An unrepresented buyer may rely heavily on the listing price or online estimates without studying recent comparable sales, current competition, market conditions and the property's individual characteristics.

Understanding comparable properties can help a buyer make a more informed decision about what they are willing to offer.

An offer involves much more than price. Earnest money, financing terms, seller concessions, closing costs, personal property, inspection periods, appraisal provisions, possession dates and other terms can have significant financial consequences.

A seemingly attractive purchase price may not be as attractive once the entire transaction is considered.

Real estate contracts can contain numerous deadlines. Inspection periods, financing requirements, appraisal provisions, document reviews and other contractual obligations may have specific dates associated with them.

Missing a deadline can potentially affect a buyer's contractual rights or earnest money. Buyers representing themselves need a reliable system for tracking every requirement and deadline.

In a competitive market, buyers may be tempted to waive inspections, shorten due-diligence periods or remove other contingencies to make an offer more attractive.

Those decisions can involve significant risk. Before giving up a contractual protection, buyers should understand exactly what they are giving up and what could happen if a problem is discovered later.

A general home inspection can be extremely valuable, but it may not address every potential issue. Depending on the property and location, buyers may also consider specialized evaluations involving roofing, HVAC systems, termites or other pests, sewer or septic systems, pools, foundations and other components.

Buyers should also review available disclosures and conduct appropriate due diligence regarding issues important to them.

Inspection reports can contain dozens of observations, ranging from minor maintenance items to significant defects. Buyers sometimes react by requesting that virtually everything in the report be repaired.

A more strategic approach is to understand the severity, cost and importance of the findings and determine which issues genuinely affect the buyer's decision to purchase the home.

The down payment and monthly mortgage payment are only part of the financial picture. Buyers should consider property taxes, homeowners insurance, HOA fees when applicable, utilities, maintenance, repairs and future improvements.

Understanding the complete cost of ownership can help prevent a buyer from becoming financially stretched after closing.

Mortgage approval is not necessarily the end of the financing process. Lenders may verify a borrower's credit, employment, assets and financial circumstances again before closing.

Financing a vehicle, opening new credit accounts, increasing credit-card balances, changing employment or moving significant amounts of money can potentially affect loan qualification. Buyers should discuss significant financial changes with their lender before making them.

Some buyers decide to proceed without a REALTOR® because they believe they can handle the transaction themselves. That doesn't mean they must navigate every issue alone.

Real estate transactions can involve agents, lenders, inspectors, appraisers, title or escrow professionals, insurance professionals, contractors and, when appropriate, attorneys or tax professionals. Knowing when to seek specialized advice can be just as important as knowing what questions to ask.

Ask yourself whether you are comfortable evaluating market value, preparing and negotiating an offer, understanding the purchase contract, tracking deadlines, reviewing disclosures, coordinating inspections and negotiating issues that arise before closing.

An experienced local REALTOR® can provide market knowledge and transaction guidance, but buyers should interview prospective agents and understand the services, duties and compensation arrangements being offered before choosing representation.