12 Most Costly Mistakes Even Smart San Mateo County Home Buyers Make and How You Can Avoid Them
1. Most Costly Mistakes Home Buyers Make
Thanks for joining tonight’s webinar. We will begin
shortly. To download the slides, please visit
http://budurl.com/WebinarHandout
Tonight’s Speaker
Raymond Stoklosa
Managing Broker and Co-Owner
The RayChel Realty Group
Phone: (650) 655-2500
www.LivingWellinSanMateo.com
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Purpose and Goals of Tonight’s Webinar
Purpose
Empower and Educate Home Buyers
Goals
Share with you the common home
buying mistakes even smart people
make and how to avoid
Leave you more aware and informed
about buying a home
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Questions During the Webinar
Home buying experts are available to answer
questions throughout the presentation
This is an interactive learning environment. You
will get the most value from this program by
having your specific questions answered.
The only dumb question is the one you don’t ask
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2. Questions During the Webinar
You may type questions in at any time during the
presentation – Question box on your screen
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12 Most Costly Mistakes
Home Buyers Make…and
How You Can Avoid Them!
Presented by
Raymond Stoklosa
Managing Broker and Co-Owner
The RayChel Realty Group
Phone: (650) 655-2500
www.LivingWellinSanMateo.com
The RayChel Realty Group
www.RayChelRealtyGroup.com
It’s All About Value
• Value means getting your money’s worth
• Best way to get your money’s worth is…
Buy Mistake Free!
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3. Common Mistakes Smart People Make
Trip Hazards Along the
Road to Home Ownership
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Mistake #1: Underestimating Location
Location, Location, Location!
Location is the…
• Most venerable principle in real estate
• Single most important influence on value
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Location Will Determine
• How well you’ll enjoy living in the house
• How much it sells for when the time comes
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4. The Importance of Location
An Inferior Location Will…
• Restrict the property’s appreciation
• Hinder your ability to sell the property
Buy the
B th very b t l
best location you can comfortably
ti f t bl
and confidently afford.
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People Want to Live Near Jobs & Services
• Homes Retain Value Best
Located within 35 miles from major city center
Served by Superior Schools
Strict Limits on Growth and Development
Substantial Commercial Base
Well maintained streets, parks & neighborhoods
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What Makes a Good Location?
• Served by a Well Performing School District
• Quiet Neighborhood
• Low Traffic Street
• No Ugly Eye Sores
• Free of Nuisances
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5. When Buying … Shop Location First
• You Can’t Change the Location
• If you don’t like the city, neighborhood,
street or site, PASS and look no further!
Buy the very best location you can
comfortably and confidently afford!
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Mistake #2: Not Recognizing Incurable Defects
What is an incurable defect?
Any “adverse condition” that
cannot be rectified with a
reasonable amount of money
or effort.
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Adverse Conditions
• Busy Street or Freeway
• Proximate to Commercial or Industrial Area
• Neighborhood Nuisances
• Land Prone to Soil Movement
• Near Undesirable Landmark
• Next to Active Railroad Tracks
• Airport Flight Path
• Stigmatized Property
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6. Consequences of Incurable Defects
Property with an Incurable Defect is
worth less than a property that
doesn’t possess the same defect – all
other things being equal.
If you buy a property at a discount
because of an incurable defect…
• You will have to sell it at a discount
• Or, you will have difficulties producing a
timely sale
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Remember…
The best time to think about selling a house is
BEFORE you buy it.
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When Buying …Be Aware of Incurable Defects
It’s OK to buy a home with an incurable
defect…
Just don’t over pay for it!
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7. Mistake #3: Ignoring Inept Designs
What is an “inept design”?
• Flaws that affect style, proportion and
functionality
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Inept Design Flaws
• Reverse floor plan
• 4 bedrooms, 1 bath
• Huge retaining walls
• Isolated master bedroom
• Severe hillside lot
• Shared drive-way
• Access through BR to BR
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Consequences of Inept Design
Value of a home with an Inept Design is
diminished by the severity of the ineptitude
Always ask yourself…
“How difficult or easy will it be to sell this
property when the time comes?”
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8. When Buying…Be Aware of Inept Designs
It’s OK to buy a home with an inept design…
Just don’t over pay for it!
p y
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Mistake #4: Bidding Blind
Lack of Knowledge About Current Market…
• Conditions
• Price structure
• Trends
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When Buying…Review Market Analysis
• Shop & Compare
• Similar Homes
• Recent Sales
• Pending Sales
• Guard Against Over Paying!
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9. Mistake #5: Buying Emotionally
Buy Emotionally at Your Own Peril
• Control Your Emotions
• Detach yourself
• Assess your personal needs
• Evaluate the home s merits
home’s
Treat every real estate purchase as an
investment…your most important investment.
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Mistake #6: Not Negotiating Seller Concessions
• Every transaction is different
• Determine the leverage points
• Discover who has a Competitive Advantage?
• Negotiate - If you don’t ask, you’ll never get!
ask
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Mistake #7: Poorly Packaged Purchase Offer
• Strong Offer Package demonstrates
Buyer’s Ability and Desire to Buy
• Poorly Packaged Purchase Offer
y g
Indicates Inability to Perform
Implies Lack of Commitment
Suggests Potential Buyer’s Remorse
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10. What Goes into a Well Package Purchase Offer?
• Fully Completed & Signed Purchase Contract
• Genuine Pre-Approval Letter
• Proof of Funds
• Fully Approved Disclosure Package
• All Advisories Signed
• Personal Note to Seller with Photograph
• Copy Earnest Money Deposit Check
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Mistake #8: Superficial Due Diligence
Stop! Look! Listen! And Look Again!
• Buyer must exercise reasonable care
Review disclosures carefully
Question omissions and inconsistencies
Read Advisories
Request insurance claims history
Investigate Property Condition
Obtain written reports
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Mistake #9: Not Buying a Home Warranty
Home Warranty Protection Plan
• Contractual guarantee to repair or
replace malfunctions appearing in
certain systems within a specified time
period after payment of deductible
• Covers Certain Major Malfunctions
Furnace
Water Heater
Plumbing stoppages
Heat Pump
• Coverage May Vary – Read Policy!
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11. Mistake #9: Not Buying a Home Warranty
• No Home Warranty Covers:
Known pre-existing conditions
Mold and mildew problems
Items improperly installed
Cosmetic defects
Previous or attempted repairs
Hazardous materials issues
• HWPP is big protection for
little cost
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Mistake #10: Closing Cost Surprises
Closing costs are …
• Charges for Services
• Incurred by Buyer and/or Seller
• Allocated by Custom
• Controlled by Contract
Review an Estimate of Costs Before Signing Offer
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Review an Estimated Closing Statement
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12. Mistake #11: Working with the Listing Agent
• Listing Company is the Seller’s Agent
All Sales Associates Represent the Seller
• Listing Company must…
Promote and protect the Seller’s interests
Negotiate the best business deal for the seller, not
the buyer
The Seller will be represented by a
professional…Why shouldn’t you?
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What is the Role of the Buyer’s Agent?
Buyer’s Agent Duties…
• Advocacy
• Technical Expertise
• Professional Advice
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Won’t a Buyer’s Agent Cost Me More?
• No…You Pay Nothing More
• Commission Paid by Seller
• Buyer’s Agent Works for FREE Until You Buy a
Home
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13. When Buying…Hire a Buyer’s Agent
The success or failure of your transaction will
greatly depend on your selection of an agent
to represent you.
How and Who Will Represent You…Is Your
Choice
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How to Select a Buyer’s Agent?
Use a comprehensive questionnaire to help
evaluate an agent.
“The Home Buyer’s Guide to Selecting an Agent”
(Will Be Emailed to You for Attending)
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Mistake #12: Financial Unpreparedness
• The Poison Pill of Home Buying
• Not Putting Your Financial House in Order
Before Shopping for a Home is Setting
Yourself Up for Failure
Find a Loan First, Then Find a Home
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14. What is a Genuine Loan Pre-Approval?
Firm Loan Commitment
• Unambiguous statement acknowledging receipt
of loan application & underwriting confirmation
• Income, Debts, Assets, Employment, Credit
History and FICO Score Verified & Substantiated
• Maximum Interest Rate & Loan Amount Stated
• Expiration date noted
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Why Do You Need a Genuine Pre-Approval?
A Genuine Loan Pre-Approval
• Demonstrates your credit worthiness
• Determines your purchasing power
• Determines your financing options
You won’t waste your time looking at houses
you cannot afford.
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Pre-Approval vs. Pre-Qualification
Get Pre-Approved, Not Pre-Qualified
• Pre-Qualification
An informal estimate of what you can afford
• Pre-Approval
pp
A formal written commitment you can rely on
stipulating the maximum loan amount, interest rate
and terms
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15. Bonus Round
Bonus Mistake #13
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Mistake #13: Failure to Understand
Roles and Responsibilities of the Parties
• Buyer
• Seller
• Agents
Home Buying is a Process, Not an Event
• Series of coordinated actions
• Haphazard approach is the #1 success blocker
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Review the Purchase Contract
Contract is the Transactional Road Map
Ignorance of Contract is the fundamental
cause of…
• Disputes between buyers and sellers
• Dissatisfaction with the transaction
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16. The Three OOPS!
It is almost always a mistake to…
• Buy a home when you expect to sell soon
• Start you house hunt before doing your
homework
• B ah
Buy home th t meets your current needs, yet
that t t d t
ignores your long term needs
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Technology Tools You Can Use at Home
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www.LivingWellinSanMateo.com
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17. Home Search
http://LivingWellinSanMateo.com/home-search/
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Ask a Real Esate Question
http://LivingWellinSanMateo.com/San-Mateo-Real-Estate-Question/
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Upcoming Webinars
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18. Webinar: Financing a Condo
Finanancing a Bay Area Condo
Monday, November 16th 6:30pm
To Register Visit:
http://budurl.com/CondoFinancing
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Webinar: Trustee Sales
Trustee Sales – The Most
Dangerous & Most Profitable
Way to Buy Real Estate
Tuesday, November 17th 6pm
To Register Visit:
http://budurl.com/TrusteeSale
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Webinar: Selling Your Home
Selling a San Mateo County Home
You Can’t Afford
Thursday, November 19th 6pm
To Register Visit:
http://budurl.com/SellMyShortSale
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for a Class Schedule
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Free Conversation
Raymond Stoklosa Chela Stoklosa Rebecca Williamson
Managing Broker and Owner
g g Agent and Owner
g Agent
g
Phone: (650) 655-2500
info@RayChelRealtyGroup.com
LivingWellinSanMateo.com
YouTube.com/LivingWellinSanMateo
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