Top 10 Mistakes Made by Most First-Time Home Buyers
Are you shopping for a new home? You may have already noticed how househunting can be bizarrely taxing to the body and mind. Don’t worry, we’re here to get you to the other side of ownership with a big smile on your face. So, let’s jump straight into the deep end and take a look at the top first-time homebuyer mistakes.
1. Not knowing what fits your budget
Many first-time home buyers seem to bite off more than they can chew It’s tempting to opt for the three-car garage, or the house with the gorgeous kitchen upgrade (even if you’re more of a takeout kind of person). But think long and hard about the financial burden you’re about to take on, and look closely at your debt to income ratio. If you have a debt to income ratio that is between 36 and 41 percent, then you can’t get a mortgage.
2. Leaving realtors out of the loop
Many first time buyers think it’ll be easy to go the DIY route rather than hiring a real estate agent. It’s understandable to want to save a few bucks. But consider this: agents get their commission from the seller, which is already factored into the price of the home, so you don’t need to worry about incurring a bunch of extra costs. Plus, a real estate agent can often help you negotiate a lower price on your dream house.
3. Ignoring mortgage qualification
The amount of money that a bank can loan you might not match with what you expected. This is especially true if you have unstable income or a weak credit history. Before making an offer to purchase your dream home, start by being pre-approved so that you can qualify for a mortgage.
4. Being overly selective
While it’s good to be aware of what you need and take your notes with you on your house-hunting adventures, being finicky when shopping for a home is the wrong move. Be flexible; be ready to make a compromise if a good opportunity comes up.
5. Having eyes that do not see
Try to look beyond cosmetic flaws, especially easy fixes like a bad paint job or carpet that hasn’t been updated since the 80’s. You don’t have to buy the perfect home today, since you’ll have years to make changes and shape it into your own space. Unless you’re just utterly horrified at the notion of holding a paintbrush or a hammer, consider making upgrades yourself after purchasing your house at a lower price.
6. Getting caught up in pretty staging tricks
To follow up on the last point, don’t be fooled by home staging tricks that make a space look nicer than it actually is. Learn everything you can about the home -- how old it is, when upgrades were made -- and trust your instincts. If a deal seems too good to be true, there’s a good chance it is.
7. Not inspecting
And on that note, make sure you know what’s lurking under the surface of your new home-to-be, long before you sign anything. Look at the kind of repairs that might be needed and assess the costs.
8. Neglecting the future
You can’t predict the future, but being informed of the things going on around you always pays. Find out about zoning, and any construction plans near your potential home. You don’t want to get attached to a place that’s going to be right next sewerage plant.
To avoid future surprises, you should do some research to find out what different parties are planning about your area. Do you notice a lot of undeveloped land? Are there any development plans? Is there a decline in home values? Ultimately, questions like these will help you figure out how your neighborhood will look like in the future.
9. Making the wrong compromises
If you have four kids and need a four-bedroom home, do not buy a smaller house just because it is cheaper. Make compromises that do not have long term strains.
10. Forgetting the closing costs
Closing the home costs you about 2-5 percent of the purchase value. You need to plan for this to avoid stumbling into costs you are not ready to pay. Protect your money, you need to be as cunning as a fox.
Having identified some of the obvious mistakes, you are now ready to take the next step. Consult a professional and get moving – you dream home is waiting for you!