10 First-Time Homebuyer Mistakes can be avoided if you learn all you can before you pick up the phone, go to the website, or go to the mortgage company or bank…
This post has been updated…
Being a first-time homebuyer can be a tricky business, as the prior show Property Virgins Show demonstrated weekly. It’s an emotional process in which anyone making such a large purchase needs to try to be ready. However, you probably never will be ready for the process until they go through it and understand it.
There are common mistakes that first-time homebuyers often make that perhaps you can avoid if you’re reading this.
1) Expecting Too Much for the Money – You cannot expect, unless you are wealthy, to purchase your dream home the first time you buy a house. It is likely you are just beginning so you’ll purchase a starter home that’s good enough and within your budget. This allows you to build equity so that later you can purchase a larger and better home when you really need it.
2) Not Understanding Their Market – Each community has a different market climate. Some areas have houses that are languishing and staying on the market for months and even years. In others, they’re being snapped up within hours of going on the market. Understand what it’s like where you live.
3) Not Seeking Advice from a Mortgage Lender or Broker – A lender or broker is separate from your real estate agent. You should go to them first before you even start the buying process. Let them check your credit and get you a pre-approval letter. You will give this letter to the real estate agent as an assurance to them that you can actually buy a house. If there is a problem with your credit, a good broker will tell you what to do to fix it. If your credit is fine, they’ll tell you what to do to keep it that way.
4) Not Using the Services of an Experienced Buyer’s Agent – A buyer’s agent is someone who works on your behalf to get you the best deal. If you look at houses that a particular realtor has listed, sometimes they may try to get you to buy at a higher price than you need to. Not always, but sometimes.
One Of The Most Important Steps in The Process Of Starting To Buy That New Home
5) Not Understanding What They Can Really Afford – What the bank says you can afford and what you can really afford may be two different things. Aside from the cost of the mortgage, you should factor in the cost of private mortgage insurance (PMI), taxes, insurance, utilities, and more. Your broker can provide a list of expenses that will be included in your monthly payments.
6) Not Working on Their Credit before Entering the Process – Before you even think about going to a lender or broker to get preapproved, take some time to work on your credit. Don’t purchase things on credit, pay down debt, and show that you can handle revolving credit. Don’t be late on any payments, even your cell phone bill. Sock every penny you can into your savings account.
7) Thinking Bank-Owned Properties Are Affordable – While it looks cool on HGTV to watch the flippers buy a bank-owned property and flip it, it’s not that easy. Once you’re locked into a bank-owned transaction, it could take months and even a year. Plus, in some cases, homeowners have a year to get the property back even after they buy it.
Do Not Allow Yourself To Do These Three Things -10 First-Time Homebuyer Mistakes
8) Getting too Excited in Front of the Seller’s Agent – When you go to open houses, don’t act too excited if you do find your dream house. Take pictures if you’re allowed, stay calm, and be non-committal. Then call your buyer’s agent to help you with the deal.
9) Skipping Inspections – While inspections are an added expense, and money you can’t get back even if the transaction goes south, they are very important. Usually, the inspection process starts after you’ve made an offer on the house. This can cost $250 or more depending on the size of the house and what you’re having inspected.
If anyone else has had an inspection recently if the seller has a copy of it and they may let you see it. You can choose to use that one, but don’t skip without knowing what you’re getting into. A couple hundred down the tube is a lot better than $200,000 down the tube.
10) Not Researching Neighborhoods – Before you call your realtor, and you have your preapproval you should do some of your own legwork. You can use sites like Trulia.com, Zillow.com, and others to look at houses in the areas you want to live in. This will help you avoid sticker shock. Zillow.com even tells you what they think the house is worth compared to what other houses are selling for in the area.
Understanding the factors that go into play to purchase a house will help you avoid many first-time homebuyer mistakes. The important thing is to keep your cool, not expect too much and when you are delivered your dream, don’t show it. Stay calm, make your offer, and hold on for the ride.
Know Before You Go… how much can you afford –
EndNote
In the process of giving you the lowdown on these 10 First-Time Homebuyer Mistakes – it is easy to get excited about buying and having a new home. However, it is wise to be cautious as this is your largest financial investment and it is usually a long one.
