The 10 Worst Mistakes Made By First Time Home Buyers
The 10 Worst Mistakes Made By First Time Home Buyers
Are you gearing up to buy your first place?
Shopping for a home is exciting, exhausting and a little bit scary. In
the end, your aim is to end up with a home you love at a price you can
afford. Sounds simple enough, right? Unfortunately, many people make
mistakes the prevent them from achieving this simple dream.
1. Not Knowing What You Can Afford If you end up looking at
homes that are outside your price range, you'll end up lusting after
something you can't afford, which can put you in the dangerous position
of trying to stretch beyond your means financially or cause you to feel
unsatisfied with what you actually can afford. You may even learn that
you can't afford the type or size of home that you desire and that you
need to work on reducing your monthly expenses and/or increasing your
income before you even start looking.
2. Skipping Mortgage Qualification What you think you can afford and what the bank is willing to lend you may not match up, especially if you have poor credit or unstable income, so make sure to get pre-approved
for a loan before placing an offer on a home. If you don't, you'll be
wasting the seller's time, the seller's agent's time, and your agent's
time if you sign a contract and then discover later that the bank won't
lend you what you need, or that it's only willing to give you a loan terms that you find unacceptable.
3.Failing to Consider Additional Expenses Once
you're a homeowner, you'll have additional expenses on top of your
monthly payment. Unlike when you were a renter, you'll be responsible
for paying property taxes, insuring your home against disasters and
making any repairs the house needs (which will occasionally include
expensive items like a new roof or a new furnace).
If you're interested in purchasing a condo,
you'll have to pay maintenance costs monthly regardless of whether
anything needs fixing because you'll be part of a homeowner's
association, which collects a couple hundred dollars a month from the
owners of each unit in the building in the form of condominium fees.
4. Being Too Picky Go
ahead and put everything you can think of on your new home wish list,
but don't be so inflexible that you end up continuing to rent for
significantly longer than you really want to. First-time homebuyers
often have to compromise on something because their funds are limited.
You may have to live on a busy street, accept outdated decor, make some
repairs to the home, or forgo that extra bedroom. Of course, you can
always choose to continue renting until you can afford everything on
your list - you'll just have to decide how important it is for you to
become a homeowner now rather than in a couple of years.
5. Lacking Vision Even
if you can't afford to replace the hideous wallpaper in the bathroom
now (a can of paint is inexpensive), it might be worth it to live with the ugliness for a while in
exchange for getting into a house you can afford. If the home otherwise
meets your needs in terms of the big things that are difficult to
change, such as location and size, don't let physical imperfections turn
you away. Besides, doing home upgrades yourself, even when you have to
hire a contractor, is often cheaper than paying the increased home value
to a seller who has already done the work for you.
6. Being Swept Away If you're on a budget, look for homes whose full
potential has yet to be realized. Also, first-time homebuyers should
always look for a house they can add value to, as this ensures a bump in
equity to help you up the property ladder.
7. Compromising on the Important Things Don't
get a two-bedroom home when you know you're planning to have kids and
will want three bedrooms. By the same token, don't buy a condo just
because it's cheaper when one of the main reasons you're over apartment
life is because you hate sharing walls with neighbors. It's true that
you'll probably have to make some compromises to be able to afford your
first home, but don't make a compromise that will be a major strain.
8. Neglecting to Inspect It's tempting to think that you're a homeowner the moment you go into escrow,
but not so fast - before you close on the sale, you need to know what
kind of shape the house is in. You don't want to get stuck with a money
pit or with the headache of performing a lot of unexpected repairs.
Keeping your feelings in check until you have a full picture of the
house's physical condition and the soundness of your potential
investment will help you avoid making a serious financial mistake.
9. Not Choosing to Hire an Agent or Using the Seller's Agent Once
you're seriously shopping for a home, don't walk into an open house
without having an agent (or at least being prepared to throw out a name
of someone you're supposedly working with). In Texas, real estate agents must represent the sellers best interest UNLESS they have an agreement to specifically represent the buyer. As a buyer, it makes sense that you'll want a professional with great negotiating skills to guide you through the process. Best of all, having an agent represent you won't cost you a dime because the agents have a cooperative agreement to split commissions if the buyer has an agent.
10. Not Thinking About the Future It's
impossible to perfectly predict the future of your chosen neighborhood,
but paying attention to the information that is available to you now
can help you avoid unpleasant surprises down the road.
For a free, no obligation, evaluation of your homes market value, please
call or email Mark Mulch at 972-841-2324 or [email protected]
Start the search for your next home at www.MarkSellsTexas.com
Author:Mark Mulch Phone: 972-841-2324 Dated: August 27th 2014 Views: 850 About Mark: An accomplished Realtor, small business owner, and Ironman triathlete, Mark excels in delivering a h...
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"A friend referred me to Ms. Mary Jane Smith and from our first call, she has been wonderful in guiding me through the process of buying my first home. Mary Jane answered all of my questions and I felt I knew what to expect each step of the way. She knows the DFW area and really helped me to narrow my search so I could find the home that was right for me. If you are looking for a realtor who will be a true partner in your home search, contact Mary Jane!"