First Time Home Buyer Mistakes to Avoid

first time home buyer mistakesBuying your first home can be a complicated, time-consuming, and often emotional experience and most first time home buyers wind up making mistakes they wish they could take back.

US News recently made a list of some of the most common first time home buyer mistakes made before and during home buying process. Take a peek at the list below; knowing what mistakes other people make – and how you can avoid them – will help eliminate headaches, stress and unforeseen costs that too many first time homebuyers seem to experience.


When you start looking at homes, it’s easy to get caught up in those online ads and deciding how many bedrooms you want.  But before you step foot in your first open house, you need to check your credit score.  I’m talking about several months before you start your housing search because you want to have time to clear out debts, if needed, and fix any errors that might appear on your credit report before you apply for a mortgage.  The cleaner your credit report and the higher your score, the more likely you are to be approved for a mortgage at a low-interest rate.


Again, before you even step foot in an open house, you’ll want to know how much you can realistically afford.  And the best way to do this is to sit down with a lender and get pre-approved for a mortgage.  This means giving the lender copies of your credit report, w2s, pay stubs, and bank statements.

Keep in mind that being pre-qualified is not the same as being pre-approved.  Pre-qualified means you’re qualified for a loan of that amount, not that you are approved for that loan.  Being pre-approved can give you an advantage over other bidders when you make an offer.


The housing crisis has proved that just because the bank will give you a loan for X amount, doesn’t necessarily mean that’s what you can afford.  Being house-poor isn’t fun and a great way to avoid this is to sit down before you start your housing search and create a detailed budget.  Look at how much money you currently spend, where it goes, and what additional expenses you’ll have once you become a home owner (ie. maintenance and repairs, homeowner’s insurance, utilities, property taxes) then decide how much you can realistically afford to pay each month.  A good rule of thumb is to devote no more than 1/3 of your monthly household income to housing costs – this includes, mortgage principal, interest, taxes, and insurance.


Many first time buyers don’t know the hidden costs involved in purchasing and owning a home.  When you sit down to figure out your budget, make sure to include costs that come up during the buying process such as closing costs, escrow fees, appraisal fees, and even moving costs.  Also consider costs that you might forget you’re responsible for once you own the home such as property taxes, insurance premiums, fees, utilities, maintenance and repairs.  If your A/C goes out, you’ll have to pay to repair it, so make sure to factor in those types of costs as well – because they pop up more often than you’d expect.


I meet a lot of first time home buyers who don’t feel they need the help of a real estate agent but here’s the thing, an agent eliminates a lot of the stress and legwork associated with buying a home.  As an agent, I have access to all of the current listings as well as ones that have sold in the past, and my job is to sort through those listings and find the ones that are possible matches.  But agents don’t just make viewing appointments, we create comparative market analyses to determine proper pricing, meet with necessary inspectors, read disclosures, help you navigate that  9 page legal contract, and negotiate the best deal possible for you when you find the house you want . And once the sale is complete I’ll continue to help you with referrals for tradespeople you might need, problems that come up, etc. There are definitely agents out there who don’t care about their clients, but finding someone who wants to get you the best home and the best deal and keep you as a client for life, will go above and beyond to make sure your home buying processes runs smoothly from beginning to end.


Pushy realtors who are only out for their commission – we all hear about them.  Don’t hire them.  If you are not comfortable with your real estate agent or feel like they’re pressuring you into a home that you don’t like, let them go and move on.  A good real estate agent wants you to be so happy that you’d refer them to all your friends and use them again in the future.  Being able to connect with your real estate agent, especially when purchasing your first home, is of the utmost importance, so don’t settle!

This goes for your mortgage lender as well.  You want to have complete confidence in your lender and feel comfortable asking questions and discussing all of your financial options so you know what you’re getting into.


Being close-minded while searching for a home is another big mistake first time home buyers make.  You can’t expect to get everything on your wish list, so I always suggest that clients make 2 lists – a need list and a want list.  The need list, should include “must haves” or deal breakers – thinks like the towns or areas, bedrooms, etc.  The want list should have things more like stainless steel appliances, granite counters in the kitchen, etc.  Being open-minded and flexible can help prevent you from being disappointed later on – or discounting houses that would’ve been perfect for you had you come in with realistic expectations.


You found the perfect home, you’re in love, you can’t wait to start decorating… I know, it’s so easy to go to that place but wait until after you have a home inspection done before you become too emotionally invested in a home.  Too often, things will turn up on the home inspection report that should be deal breakers, but buyers already have their hearts set on the home so they take it anyway – only to have it backfire on them in the long run.


Ok, this is one that is more common with first time home buyers who don’t work with a good agent but still – While the neighborhood might be perfect for your currently lifestyle, consider whether it’ll still work for you in the future.  For instance, you may not have been planning on having kids for a few years when you purchased your home so you didn’t consider things like school districts or nearby parks or whether it’s a family-friendly neighborhood – but now you’re expecting and really wishing you’d thought about that earlier!  But don’t worry, a good real estate agent should bring up these points and other things to consider when you start shopping for a home.


But I’ve  just started the buying process, why would I be thinking about selling a home already?!  Life is full of surprises, people get transferred, outgrow homes or decide they need to be closer to relatives – whatever the reason is people move.  And when it comes time to put your house on the market, you want to make sure it won’t be really hard to sell.  Just because you love that super modern exterior or don’t mind being on a busy street doesn’t mean that it won’t be a deal breaker for other buyers.  Being in a position where you need to move and can’t sell your home is not a fun place to be, so make sure there is nothing about the home you’re about to purchase that could make it impossible to sell down the road.



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