If you are a first-time home buyer, finding the right home for you and your family can be overwhelming and stressful. There are many decisions to make. Before you start looking, make sure you’re not committing one of these classic home buyer mistakes.
You haven’t been pre-approved? Don’t go shopping! Understand the math of your future home loan or mortgage and know what you’ll qualify for – this will stop you from looking at homes or neighborhoods that are beyond your financial reach. Be aware, a pre-qualification is not the same as a pre-approval. A real estate agent can recommend lending institutions or banks. Ask for friends or coworkers for a recommendation of a mortgage company they have had an excellent experience with.
2. Ignoring the additional costs
Most first-time home buyers are currently living in an apartment or with family. Although you may be used to paying rent and utilities, there are more monthly and annual expenses associated with home ownership. Some costs are easy to calculate prior to home ownership like property taxes, homeowner’s insurance or even homeowner’s association fees. But there can be many unforeseen additional costs like emergency repairs or replacements. Along with regular maintenance costs.
3. Thinking a fixer-upper is a cheaper way to go
Some home buyers purchase a home with the expectation of doing a full renovation, many homebuyers simply want to move in and make it their own. Cosmetic changes like painting or refinishing floors are fairly easy and inexpensive. Unfortunately some home buyers see a home as having unlimited potential without understanding how much it might cost and thinking they can do it all themselves. If you are interested in purchasing a home that needs repairs and upgrades, consider hiring a professional contractor to tour the home with you and give you a realistic cost and time estimate for your desired renovations.
4. Not hiring an inspector
No, I’m not talking about an appraiser. Your lender won’t require one, but you should always have an experienced licensed home inspector check out the home you want to purchase. Home inspectors don’t appraise the value of the home, they spend their time looking at the major components of the home like heating, plumbing, roof, structural issues, etc.. and will give you a report on their findings.Home inspectors spend several hours assessing a home and provide a lengthy, written report on their findings. Although they cannot say if the work was done well, they can let you know if the home was built to code.
5. Thinking you can buy it by yourself
Although you’ve probably done your homework, it’s always best to hire a licensed real estate agent. Real estate agents know the market, they understand the competitive prices of comparable homes, and can help you identify the homes that will fit your needs. They also are invaluable in negotiating the purchase price and terms. If you don’t know an agent, ask friends for recommendations.