Like any activity you undertake for the first time, you’re bound to make some blunders when you decide to buy your first home. It is, after all, a complex process that involves a lot of moving parts. Not only are you trying to select a home that meets your needs and your budget, but you’re also listening to advice from a real estate agent, dealing with lenders, and negotiating with sellers. So the learning curve can be understandably steep. However, you can avoid a lot of frustration and financial hardship when you know about some of the most common mistakes first-time home buyers make. Here are a few you’ll want to avoid.
Perhaps the worst mistake you can make centers on your budget. First, you need to figure out what you can afford to pay when you take on a mortgage and associated costs like property taxes and insurance policies (homeowners, flood, earthquake, and mortgage insurance, just for example). Don’t forget to factor in extra costs since you’ll be on the hook for more than just a monthly mortgage. But you also need to get pre-approved for a loan. This process could significantly impact your price range when you compare it to your budget. And if you fail to get pre-approved, you might not have the leverage to win a bidding war on your dream home when you find it. It’s a situation where the early bird (i.e. the buyer that is pre-approved) gets the worm (the property in question).
Another common mistake is conflating your wants and your needs where a property purchase is concerned. You may have cosmetic extras like hardwood flooring or granite countertops on your list of must-haves, but you can’t let these minor extras make or break your decision to buy a home. What you really need is a specific square footage or number of rooms, a specific location (near work or in a certain school district), or a specific price (within your budget). The other stuff is all just icing on the cake, so don’t get too nitpicky or you could lose the practical home you need in search of the fantasy home you want.
Other common mistakes include agreeing to forego home inspection (wherein structural and other potentially costly flaws could be uncovered), failing to negotiate fees (like closing costs), and deciding to go it alone instead of hiring a real estate agent from a reputable firm like Berkshire Hathaway Home Services, Alliance Real Estate, just for example. This last is a major mistake since a knowledgeable and experienced realtor can give you the guidance you need to find the perfect home and get it at a price you can afford. For your first time out you really need a qualified realtor to hold your hand and help you avoid the many common mistakes inherent to buying a home. So get your ducks in a row, put together a clear plan for what you need, what you want, and what you can afford, and get the right professional help. This is the best way to find your dream home the first time out the gate without any major blunders along the way.