There is a lot of good advice on what you should do when looking to buy your first home, but sometimes it’s not enough to help you through the whole home buying process. If you are someone who learns best when you know what not to do, then you should know about these seven common mistakes that many first-time home buyers make.
Buying A Home Without A Realtor
It’s one thing to browse real estate websites, daydreaming about the day you will buy a home, but it’s an entirely different matter to opt to try and buy your first home without any assistance.
A good real estate agent is far more than someone who opens doors and shows you around properties. With the help of a real estate agent, you can:
- Learn more about the neighborhood of the home you are interested in
- Have help negotiating with the seller
- Have the relator’s assistance with paperwork
- Receive expert guidance throughout your home buying process
Not Understanding Your Budget
Another common mistake first-time home buyers make is setting their sites on a price range they can’t actually afford. While most of these overly-optimistic buyers do calculate their various monthly payments such as potential mortgage, average utilities, car payment, credit card payments, and other recurring bills, they cut their finances incredibly close.
You should never be one accident away from financial ruin, so be sure to choose a home that you can comfortably afford the monthly mortgage payments as well as your other bills, with some money left over for savings. That way, if something unexpected does happen such as a car accident or your water heater needs replacing, you won’t be in dire straits.
Avoid Looking At Credit Reports
The old, “Out of sight, out of mind” doesn’t really work when it comes to shopping for a new home. If you haven’t checked your credit reports, you may be in for a shock when you go to get approved for a home loan.
To skip the shock, there are plenty of great free credit report sites where you can double-check that everything is looking good. If there are any mistakes or issues you can resolve that show up in the report, be sure to correct them before talking to lenders.
Sitting Down With Only One Lender
Some first-time home buyers can become intimidated when talking to various lenders about mortgage rates and may settle for the first quote they receive. However, this can be a serious mistake.
First-time home buyers, in particular, have a variety of home buying programs they may be able to take advantage of, along with finding more competitive lenders.
Become Discouraged By Competition
If you live in an area with a competitive housing market, it can be a little discouraging to find you were outbid by all-cash investors or those willing to go above the asking price to ensure the purchase.
Skipping The Home Inspection
When buying a home, a home inspection is an optional step that really shouldn’t be considered optional. There are some first-time home buyers who want to cut costs and skip out on paying a few hundred dollars on a home inspection, only to pay down the road when a hidden issue rears its head.
Not only does a home inspection help you to catch current and potential issues with your prospective home, but it can also give you an out if the home isn’t up to the standard you believed it to be. Just be sure that your offer on the house is contingent on the home passing the inspection.
Underestimating Renovation Costs
There likely isn’t an American who hasn’t seen an episode where a team goes in and flips a disaster of a house into a dream home. But the reality is, most people don’t have the abilities needed to make buying a run-down home a viable proposition, and the necessary contractors can be incredibly expensive.
So, as you look at fixer-upper homes, carefully weigh your abilities, time constraints, and costs before committing to a house.
Once you understand what potential pitfalls await you when buying your first home, the better you will be able to not only avoid these problems but learn to enjoy the overall process of buying your first home.