COMMON MISTAKES MADE BY FIRST-TIME HOME BUYERS
Five Common Mistakes Made By First-Time Home Buyers
In addition to getting married and starting a family, buying your first home is one of the most exciting and important milestones of your life.
Unfortunately, it can also be one of the most stressful experiences of your life.
With so many unknown variables involved in a real estate transaction, first-time home buyers are prone to make anxiety-inducing mistakes as they navigate the complex process. Fortunately, with these five tips, you can avoid making the same mistakes others have made.
Delaying Loan Pre-Approval
When you’ve made the decision to buy a home, you may want to start looking at houses right away. While it doesn’t hurt to start doing research, your first order of business should getting a pre-approval on the loan you’ll take out for your new home (not to be confused with a pre-qualifying loan).
Many prospective home buyers make the mistake of looking at houses before getting the loan approved, which means they waste time looking at houses in the wrong price range. It can also be annoying to sellers to take the time to meet with you, only to discover that you don’t even know if you’ll be able to afford the house.
About three months before you plan on meeting with a lender to get your pre-approval loan, check your credit score and make sure there aren’t any errors. If you can resolve problems early, you’ll improve your chances of getting a better loan. Work with your real estate agent if you need help identifying a good lender.
Unrealistic Financial Expectations
As long as you’ve taken the time to get your pre-approval loan, you should have a general idea of how much money you’ll be spending on a new house. Many buyers are unprepared, however, for all of the other costs associated with purchasing a home.
Some of these additional costs include: closing costs, home inspection fees, appraisal fees, and home warranties. There are also costs that may apply after you’ve purchased the home: utility fees, homeowners association fees, and maintenance fees.
Every situation is different—some additional costs might only apply to certain homes, while others can be negotiated. Your realtor can tell you which costs you need to consider for every home you consider.
All too often, buyers freeze when it comes time to commit and make an offer on a house. Or maybe they have a case of the “what-if’s” and can’t help wondering if they might find something better out there if they are a little more patient. These are natural sentiments since buying a home is one of life’s biggest financial investments—and a homebuyer will most likely be committing hundreds of thousands of dollars to a particular home and location.
In 2016 most homes were on the market for an average of 36 days. So while patience can be a virtue, when it comes time to buy a house you have to be ready to act fast. The solution to your analysis paralysis is fairly simple: do your research.
Sit down with your spouse or significant other to create a housing wish list, then prioritize everything on the list. Is it more important to be near a park where the kids can play, or near the freeway entrance so Dad can get to work? Are you okay with a fixer-upper as long as you’re in a good neighborhood?
If you’ve done your research and decided what your priorities are, it will be easier to know whether you should quickly make an offer or wait a bit longer to see what else the market has to offer.
The Home Inspection
One of the absolute worst mistakes people make is not having a licensed home inspector perform a thorough home inspection. If you’re tempted to skip the home inspection to save a few hundred dollars, there are plenty of horror stories out there that may deter that line of thinking.
Be sure that you pay for the inspection, not the seller. As the buyer, you have a greater vested interest in making sure that everything is done right. If there are any major problems with the house, you want to find out now—not a few months after closing when your pipes explode.
Also, be sure that the home inspector you hire has Errors & Omissions (E&O) insurance so if they miss something vital, they are liable and responsible for the oversight.
Hiring the Wrong Agent
Hiring a realtor who isn’t attentive to your needs and doesn’t work well with you might be one of the worst mistakes you can make. A poor seller/agent relationship can cause a lot of frustration, the loss of time and money, and perhaps might even lead to missing out on that “just right” house that could have been yours.
On the other hand, your realtor can be your best asset. You may have noticed that most of the solutions listed above involve a real estate agent assisting in one way or another. Invest time at the very beginning to make sure you’re hiring the best realtor for you by interviewing several candidates before committing to hire one.
Offer To Close can help you through the process of hiring a real estate agent, which in turn can help you avoid dozens of common mistakes—saving you time and money and helping to eliminate the worry and anxiety that often accompany the home buying process. By following these tips, you’ll be well on your way to finally achieving your dream of becoming a homeowner for the very first time.