Even the most prepared first-time home buyer can make a mistake in the buying process. There are so many steps involved in buying a home and so many intricacies to consider that it is nearly impossible for one person to consider everything the first time around. Fortunately, there are people and resources that can help. The right Realtor® can guide you through the buying, and online resources can help you make the most informed buying decision. Start by checking out these six common mistakes that you can avoid during the buying process.
#1) Looking for Homes Outside of Your Price Range
The first thing you need to do before you even consider buying a house is set your budget. Look at how much you can afford for a mortgage, home insurance, homeowner’s association fees, and regular maintenance costs and then work backward to see what kind of home you can afford. If you only budget for a mortgage, then you will quickly get overwhelmed by extra costs that creep up in homeownership. Plus, you won’t be able to afford other expenses like medical care and car maintenance when the vast majority of your paycheck goes into your home. Start looking at homes only when you know how much house you can afford. This will prevent you from falling in love with something out of your price range. Recommended Reading: How Much House Can I Afford? 4 Ways to Set a Budget
#2) Thinking Fixer-Uppers Save Money
Many new and experienced homebuyers think they can save money by buying a home that needs significant repairs. They would rather spend more money remodeling and repairing than simply paying a mortgage each year. However, ambition during the home buying process can turn into long-term headaches during homeownership. Renovations are often more expensive than you think, and you could end up paying more in the long-run. Plus, home renovations and remodeling can take a toll on relationships. The first few years of home ownership could be met with aesthetic disagreements and financial arguments that you otherwise wouldn’t have with a newer home.
#3) Skipping the Real Estate Agent
Some homebuyers think they can skip over hiring a real estate agent in order to save money. However, this move is penny rich but dollar poor – meaning what you save in not paying a Realtor® you will lose in lost expertise. Real estate agents make buying a home so much easier – especially, for first-timers. They also have experience negotiating with sellers to get a better deal. You could save thousands of dollars in your bid and save hundreds of hours in paperwork and research by simply hiring a Realtor®. Recommended Reading: 8 Benefits of Using a Realtor®
#4) Not Getting an Inspection
On the other side of the “fixer-upper homebuyer,” you have buyers who think new homes don’t need inspections and should be move-in ready. New homes need to be inspected just as carefully as older ones. Builders make mistakes, or there could be issues that they didn’t notice. This also applies to homes that were built three or four years ago and are still considered “new.” The previous owner could have made changes that negatively impact the house. Approach each home carefully and objectively, no matter how good the condition seems to be.
#5) Not Shopping for Mortgage Rates
You may be tempted to work with your bank because you have been a customer there for years. You may also be tempted to accept the recommended mortgage providers and take the first deals offered by financial lenders. Do not do this. One of the best things first-time home buyers can do is to approach their finances objectively. Meet with multiple lenders and mortgage providers to see who really offers the best deal. Shopping around takes more time, but you can save hundreds (if not thousands) of dollars in the process.
#6) Forgetting to Consider the Housing Market
The housing market is one of the biggest things to consider when buying a home. If you try to buy during a seller's market then you could end up paying way more than you otherwise would when the market is more moderate or adjusted. Keep an eye on home prices in your area and the selling trends from the past year or six months. It may be in your best interest to wait a few months (or even a year) and keep saving up before you decide to buy a house. Recommended Reading: How to Find Accurate House Prices Where You Want to Buy
Find a Realtor® Who Works With First-Time Home Buyers
Some Realtors® specialize in guiding first-time home buyers through the real estate process. They enjoy offering educational materials and explaining the importance of various steps and contracts. With the right Realtor®, you can feel confident in your home buying decisions and can avoid feeling overwhelmed or confused. To find the right Realtor® for your needs, turn to Effective Agents. Our data-based algorithm can help you sort through hundreds of Realtors® until you find the best ones in your area. Sort through your options by setting specific criteria and start the interview process with the best candidates. You can avoid the common mistakes made by first-time home buyers with the right team of home experts by your side.