Making your first home purchase can be an incredibly thrilling experience. However, it's essential to avoid common mistakes that cost you time and money. Here are four of the most common mistakes made by first-time buyers so that you can be prepared and have a successful purchase.
Not hiring a real estate agent
Buying your first home is an exciting time, but it's also one that can be fraught with pitfalls if you're not careful. One of the most common mistakes that first-time home buyers make is not hiring a real estate agent. While it may seem like you can save a few dollars by going it alone, the reality is that you'll likely end up paying much more in the long run. A good real estate agent will have your best interests at heart and will be able to help you navigate the often complex world of home buying. They'll be able to offer expert advice on everything from finding the right property to negotiating the best price, and they'll even be able to help you find funding if you need it. In short, hiring a real estate agent is one of the best ways to ensure that you have a successful and enjoyable first-time home-buying experience.
Not getting preapproved for a mortgage
First-time home buyers often make the mistake of not getting preapproved for a mortgage. There are several reasons why this is a mistake:
-
Without preapproval, buyers will have no idea how much they can afford to spend on a home. This can lead to falling in love with a property that is out of their price range.
-
Not being preapproved can put sellers off from working with a buyer. After all, why would a seller want to work with someone who hasn't even been approved for a loan? It signifies a lack of financial security.
-
Getting preapproved for a mortgage gives buyers the confidence to put in strong offers on properties. With preapproval in hand, buyers can show sellers they are serious about purchasing a home.
In today’s competitive real estate market, home buyers need to do everything they can to stay competitive; getting preapproved for a mortgage strengthens your chance of accepting your offer.
Not doing your research
One of the most common mistakes that first-time home buyers make is failing to do their research. With so much information readily available online, there is no excuse for not taking the time to learn about the process of buying a home. Not only will this help you to avoid making mistakes, but it will also give you a better understanding of what to expect.
The benefits of researching the home-buying process cannot be overstated. By taking the time to learn about the process, you will be in a better position to negotiate with sellers and get the best possible price for your new home. Basic research into the home-buying process could save you a lot of money and hassle in the long run.
Not considering resale value
First-time home buyers often make the mistake of not considering resale value. While it's understandable that they're focused on finding a home that meets their current needs, it's important to remember that circumstances can change. Life events like starting a family or getting a new job may lead to the need for a different type of home. That's why it's crucial to think about resale value when buying a house.
By opting for a property in a desirable neighborhood with features likely to appeal to future buyers, you can be sure to get a good return on your investment. In addition, paying attention to resale value can help you avoid costly renovations down the road. Whether you're looking for your first home or an investment property, considering resale value is always a wise decision.
Looking at homes that don’t fit your needs
Buying your first home is incredibly exciting; it is a significant life step and a milestone of economic success and stability. Because of this excitement, first-time home buyers sometimes jump the gun and will look at homes that are either outside their budget or simply do not fit their needs. Sticking to your convictions and searching for the ideal option is the best way. While the housing market has been highly competitive in recent years, and home buyers often need to make sacrifices in searching for the best home, finding the one that best suits your needs is paramount.
The last thing you want is to go through the lengthy process of buying a home only to regret it a year later. So as tempting as it may be to tour an estate that’s out of your budget or to make a less compelling home that gives you a chance to buy a home more quickly, home buyers should only consider homes that align most with their needs. Being selective with how you spend your time and energy gives you the best chance of buying a home you’ll love.
Not making a significant down payment
One of the most common mistakes that first-time home buyers make is not making a significant down payment. On the surface, it may seem like a good idea to put as little money down as possible to keep your monthly mortgage payments low. However, there are several reasons why this is not advisable.
-
If you don't make a large enough down payment, you'll likely have to pay private mortgage insurance (PMI). This can add hundreds of dollars to your monthly payments and is not tax deductible.
-
A small down payment will increase the amount of interest you'll pay over the life of the loan. In contrast, a larger down payment will help you to save money in the long run.
-
Making a larger down payment shows banks and lenders that you're serious about buying a home and that you have the financial means to do so.
Looking to buy your first home? The All Points Team of Compass can help you find the home of your dreams and avoid making common mistakes.
