Buying your first home is a milestone. It’s a step toward building your family’s future. Your house will be one of your family’s biggest assets. It will also become one of your largest responsibilities. You’ll be accountable for paying the mortgage, keeping up with maintenance and repairs, and when the time comes, fixing up your house to sell it.
The excitement of buying your first property will be tempered by the challenges and obstacles you’ll face along the way. Even individuals who have been through the process before often fall victim to a number of pitfalls. Below, we’ll highlight the 6 most common home buyer mistakes. Keep them in mind to ensure the process is as smooth and stress-free as possible.
#1 – Failing To Get Pre-Approved For A Loan
Without pre-approval, there’s no way to know how much money you can spend on a house. Sellers know this. If you submit an offer, they’ll ask whether you’ve been pre-approved by a lender. If you haven’t, your offer is likely to be discarded.
You might think you can afford to buy a $400,000 property. But until a lender examines your credit profile and agrees with you, it doesn’t matter.
#2 – Neglecting To Factor In Monthly Expenses
The costs of homeownership extend far beyond your monthly mortgage payments. If you fail to take them into consideration, you may find yourself struggling to keep your head above water.
Too often, first-time buyers neglect to think about the ongoing expenses they’ll face as homeowners. Such expenses include homeowners insurance, property taxes, and homeowners association fees. In addition, it’s a good idea to set money aside to pay for periodic repairs, such as a new roof or water heater.
#3 – Falling In Love With A Property
Keeping a tight grip on your objectivity is critical when house-shopping. Only then can you gauge whether the property you’re looking at offers the features that best suit your family’s needs and preferences.
Unfortunately, many first-time homebuyers become so enamored with a particular house that they can’t bear the thought of losing it to another buyer. If their initial offers fall flat, they quickly submit higher ones, often exceeding the seller’s listing price. Their infatuation drives them beyond the point of reason. Ultimately, they end up paying too much for the property.
#4 – Not Relying On An Experienced Realtor
A realtor can save you a considerable amount of time and money during your search for a new home. He or she can limit your search to properties that closely match your budget and needs. That way, you can avoid wasting time visiting houses you’re unable to afford or bound to dislike.
When you find a property that meets your needs, your realtor will help you to submit an attractive offer and if necessary, negotiate the seller’s price. Your agent works on your behalf.
#5 – Making Large Purchases While In Escrow
Being in escrow doesn’t guarantee that the transaction will go through. Yet many first-time homebuyers celebrate early by purchasing furniture and other large items on credit. The problem is, doing so changes their credit profile. They suddenly have a higher debt-to-income ratio (assuming their monthly income remains the same).
If a change in your credit profile is small, your lender may ignore it. But if your purchases move your debt-to-income ratio beyond the point where your lender is comfortable, you may find your loan withdrawn.
#6 – Not Having A Home Inspection Performed
Don’t simply trust the seller to point out major problems in the property you’re thinking about buying. The seller has an incentive to conceal them. Instead, have a professional home inspection performed.
An inspector will examine the foundation, walls, and roof. He’ll look for problems in the plumbing, electrical system, and attic. He’ll make certain there are no drainage issues and confirm that the appliances are in good condition. He’ll inspect for mold, check the HVAC unit, and note the slope of the driveway. In short, a home inspection protects you from having to pay for expensive repairs after taking ownership of the property.
The experience of buying your first house will present its share of thrills and frustrations. When you’re ready to start your search, contact a qualified realtor. He or she will help streamline the process and guide you toward finding and buying your dream home.