Here’s a list of some common mistakes that many first-time buyers make when trying to find the right home. Avoid making these, and your home-buying experience will be much better.
Not Finding the Right Real Estate Agent
Working with the wrong real estate agent can be worse than not working with one at all. Your real estate agent is with you from the beginning to the end of your home search, and can either make the process easier or more difficult. The agent should be someone you feel comfortable working with. They should help you understand the process and not hesitate telling you things you may not want to hear.
Not Taking Care of the Financial Aspect First
This is a two-fold issue. First, you need to check your credit report to make sure everything is accurate. You should also make sure nothing bad is on there. If there are delinquencies or large outstanding debts, work to improve your credit before you begin house-hunting.
Second, you need to get pre-approved before you shop for a house. To do this the other way around is inviting disaster. If you find the house you love and then ask for a loan approval, you may find that the seller has accepted another offer in the meantime. This can be devastating to a first-time home buyer. They often don’t realize how emotional the process can be.
Loan approvals also set the guidelines for how much house you can actually afford and makes your offer look better against other buyers without their loan approval.
Skipping the Home Inspection
Even if the house is new or looks to be in good shape, you need to have a home inspection. You don’t know what costly repairs could be hidden by new flooring and new appliances. If you get a disturbing report, you can either walk away from the deal, or ask the seller to make the repairs. Alternatively, you can go into the deal knowing you will have added costs in the near future.
Not Planning for Closing Costs
Many people don’t realize that they will have to pay costs to close the loan so they can own their house. There are numerous fees involved with this process that you should be aware of. Some of these include:
-Credit report fee
-Homeowner’s insurance fee
While you may be able to get the seller to pay some of these closing costs, you should anticipate bringing some money to the table. You can ask your real estate agent to estimate the amount you will need.
Buying More Than You Can Afford
This is one of the biggest mistakes you can make. Just because you’re approved for a loan amount doesn’t mean you should spend it all. While a lender takes into account your debt to income ratio, including debts such as credit cards or auto loans, they don’t know how much you like to spend on vacations or shopping. The mortgage payment will directly affect how much money you will have to spend on other things without breaking your budget. Be realistic about what you can afford before shopping for a home and stick with it.
Buying a home is a daunting experience. By avoiding these common mistakes, you can make the process easier.