Navigating purchasing a home is a daunting task, especially if you’ve never done it before! As a first-time home buyer, a house is likely the largest purchase you’ve made to date—and it's a decision you want to be certain about.
Here are some tips on how to avoid common mistakes when buying your first home.
Not Getting Pre-approved for a Mortgage
Getting pre-approved for a mortgage ensures a couple of things. Firstly, it will give you a clear idea of what you can afford, which will help you set a reasonable budget when house hunting. Secondly, it will give you an edge over buyers who aren’t pre-approved if you end up in a multiple offer situation when you decide to put in an offer.
Not Shopping Around for Loans
When you begin to look for a lender, don’t just accept the first rate you come across. Not comparing rates from different lenders could mean paying more than necessary over the life of the loan.
Overlooking Additional Costs
Many first-time buyers focus solely on the down payment and monthly mortgage payments but forget about additional costs that come with owning a home:
- Closing costs: Closing costs include things like title insurance, legal fee disbursements, transfer tax, etc. The final cost can range between 2-5% of the home’s purchase price.
- Property taxes: Your property taxes are due at a certain time each year and will vary in cost depending on your property.
- Maintenance fees: Some homes require more upkeep than others. Keep potential maintenance costs in mind when searching for a home.
Skipping the Home Inspection
Not having a professional inspection to save money might seem like a good idea, but it can lead to expensive surprises down the road. Finding a home’s problems before closing can also give you a better hand in the negotiation process, as the seller may accept a lower price or agree to fix the issues before closing.
Getting Too Emotionally Attached
While you obviously want to love your new home, you shouldn’t let your emotions take over when it comes to the negotiation process. Falling in love with a property can blind buyers to its faults or lead them to overbid in competitive markets.
Compromising on Important Needs
It's important to distinguish between wants and needs. Overlooking essential criteria such as the size of the home, its location, or neighborhood safety can lead to regret down the line.
Failing to Consider Future Needs
Buying a home that suits your current situation without room for growth or change might mean needing to move sooner than planned. If possible, try to consider what you may need in the future and choose a home accordingly.
Ignoring Long-Term Resale Value
Focusing solely on the suitability of a home for the immediate future without considering its potential resale value can be a costly oversight. Consider things like the location and state of the home before making a decision.
Not Paying Attention to the Paperwork
Misunderstanding the terms of the contract, or not following through with the necessary legal paperwork can lead to serious legal issues. Working with a trusted Realtor® who can help you navigate the paperwork will save you from any legal headache.
Avoiding these mistakes through careful planning, thorough research, and consulting with professionals (like real estate agents, mortgage advisors, and home inspectors) can ensure you have no regrets when it comes to purchasing your home.
