5 Common Mistakes to Avoid as a First-Time Homebuyer
Deciding that you are ready to buy your first home is a major step, but it's only the first of many tasks you will face in a long process. Unfortunately, many first-time homebuyers don't take the time to learn about the proper way to go about this massive undertaking, and many people make big mistakes that end up costing time and/or money. Here is a look at six common errors to avoid when you are in the market for your first home.
1. Not Getting Mortgage Preapproval - Your first destination when beginning the home-buying process needs to be the mortgage banker rather than your realtor's office or a prospective house. Unless you have a savings account with enough cash to pay for your home outright, you will need to take out a mortgage, and it's impossible to know what you'll qualify for without talking to a lender. Many first-time buyers think that getting a loan will be easy, so they put it off until they have already found a house they like. Unfortunately, you may find out at that point that you don't qualify for as much money as you thought you would, or the process at the bank might take too long and cause you to miss out on your dream house. Don't end up in either of these situations. Get preapproved for a mortgage before you do anything else.
2. Trying to Be Your Own Realtor - Just because you are adept with numbers and consider yourself to be a good negotiator doesn't mean you're ready to be a real estate agent. Realtors have to be trained and licensed for a reason, so you are putting yourself at a major disadvantage if you try to go into the home-buying process without representation. You need to remember how important this purchase is going to be, which often means that you can't cut corners just to save some money. Find a great real estate agent by talking to your friends or relatives and getting some referrals. Once you've found someone you trust, you'll wonder why you ever considered trying to buy a house without them.
3. Being Too Picky About the Little Things - First-time homebuyers have a well-earned reputation for being too picky about the little things and not seeing the big picture when touring prospective houses. If you find yourself commenting on how you don't like the carpeting or paint color in a room, you're looking at the wrong details. Remember that certain elements of houses can be changed cheaply and easily, so the aspects you need to focus on are the things you're actually going to be stuck with (which include location, layout, and size).
4. Skipping a Home Inspection - Just because a house looks like it's in great condition to the naked eye doesn't mean that there aren't any hazards lurking beneath the surface. Many homebuyers--especially those in situations with multiple offers--are tempted to forgo a home inspection in order to make their offer more appealing, but this decision could be a major mistake. If you don't have a professional look at the house and find the problems you may be missing, then you could find yourself owning a home that needs way more work than you can afford. You should never skip the inspection, even if a house is brand new.
5. Thinking in the Short Term - There are several different ways to make this mistake, but they can all come back to bite you. First-time buyers are often used to signing leases that lock them into one-year agreements, but you will be stuck paying off the house you buy for 15 to 30 years. It's important to consider your plans for your future--even if those plans are 5 or 10 years off. Say, for instance, that you want to have kids someday. If your dream house is in a bad school district, than what are you going to do when it's time for your children to head to kindergarten? Along the same lines, you need to think about what's likely to happen in the neighborhood you're considering. If the giant field behind your home is zoned to become an industrial park in the future, your home's value is going to suffer. Make sure to ask the right questions of your realtor now before you get locked into a long-term agreement with no way out.