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
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.
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.
Not considering resale value
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.
Not making a significant down payment
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.