Considering buying your first house? Before you can open the door to your new abode, you’ll first need to tackle the homebuying process. For first time buyers, this process can be especially daunting. To help make your first purchase a smooth one, avoid these six first time homebuyer potential pitfalls:
Overthinking the Small Things
As you imagine what your first home will look like, you may not be picturing outdated bathrooms, chipped paint or dirty carpet. As hard as it may be, try not to fixate on tiny aspects of the home that can easily be fixed with a little TLC or weekend DIY project. Unless you’re considering new construction, your home search could continue indefinitely if you’re looking for a mint-condition property. Remember that wall paint, lighting fixtures and landscape updates are all relatively easy items to fix. Consider the bigger picture and run through all the other great attributes of the home before taking a house out of the running.
Not Researching the Community
You may already have an ideal home location in mind – one that offers a short commute, a good school district and close proximity to fun restaurants and nightlife. However, there’s still more research to be done.
Besides the general location, it is important to look into a community’s crime history. Real estate websites such as Zillow or Realtor.com offer crime maps that show previously reported incidents. You may also want to speak with the local city council and learn about any upcoming developments that may impact property values.
Misunderstanding the Role of a Realtor
Realtors are often friendly and conversational professionals, but before you lay out your home buying strategy to an agent hosting an open house, keep in mind his or her role in the transaction. The Realtor is representing the seller and wants to ensure that their client gets an appealing offer.
Don’t share your max budget or just how badly your significant other has fallen in love with the property. Keep that to yourself and work with your Realtor to put together an offer that will entice the seller.
Not Speaking with a Mortgage Professional First
If you’re like most first time homebuyers, you will need a mortgage to purchase your home. There are many different types of mortgages and programs that cater to first time buyers, but the details and terms can get confusing when trying to compare your options. Before you start attending open houses, meet with a mortgage professional to review your finances and determine how much home you can afford. This will help you and your Realtor tailor your search to houses that are realistic for your budget.
Miscalculating the Cost
Purchasing a home is likely going to be the largest financial commitment you’ll ever make and it’s important to understand how the expense will extend beyond the down payment. While in contract, you’ll need to pay for a home inspection and appraisal, and your closing costs will include a variety of transactional fees and pre-payments. Then there is the mortgage payment, possible mortgage insurance and property tax you’ll need to cover each month. Your loan advisor will be able to provide you with a comprehensive list of the fees, and the total amount you will be expected to cover at closing and beyond.
Giving in to Buyer’s Remorse
It’s real and it can be scary. It happens when, after making a large purchase, self-doubt sets in and you find yourself playing the “what-if” game. You can prevent any potential feelings of regret by ensuring you’re properly prepared. Start by creating a needs vs. wants list. Knowing what you need from your future home ahead of time will help prevent you from being dazzled by unnecessary features and making an offer on a house that won’t work for you once you move in. You can also rest assured that, once you’ve purchased your home, whether it’s exactly what you always pictured or it needs some TLC, you have made a solid investment into your future and are hopefully only a few years away from gaining some solid equity. That is something you should never regret.
What first time homebuyer mistakes did you try to avoid? Share in the comments below!