If you are looking for your first home, it is easy to get caught up in the moment. You find a house that captures everything you want in a home. It is in a good neighborhood. It has the right floor plan. It is close to a park. And as you walk through the house you envision your furniture there and living life within its walls. It is often at this point, that rookie home-buyers rush the process and make multiple mistakes that they later regret.
5 Things to Avoid
- Not Using a Buyer’s Agent
With the internet and the prominence of online real estate search engines, many first-time homebuyers take to searching for themselves or they drive around neighborhoods they like until they see a home they like. Once they find a home they like, they contact the listing agent to get a showing.What’s the problem with this approach?The listing agent is looking out for the best interest of the seller. He isn’t necessarily going to tell you the reasons that property may not be the best for you. Instead, he is going to “sell” the house – after all, that is his job.
A buyer’s agent, on the other hand, works for you and your interests. It is his job to find a home that meets the needs of your family and your budget. It is also his job to consider future moves and market values of the home you purchase. A buyer’s agent also knows how to recognize problem properties – and, yes, there are some out there.
Every rookie homebuyer needs an unbiased person who can tell them when to walk away.
- Getting one mortgage quotePrior to looking for a home, you will likely get pre-approved for a line of credit. But when it is time to sign a mortgage, don’t just go with the first package you find.
“Why it’s a mistake: Mortgage rates can vary a lot between lenders. According to MIAC, a mortgage and financial services industry analytics firm based in New York, N.Y., the variance can be 0.25 to more than 0.50 percentage points, depending on the loan type.
It’s definitely worth your time to do a bit of comparison shopping now. How worth it? A mortgage calculator doesn’t lie: On a $300,000 home loan at 5%, you’d be paying $279,767 in interest over 30 years. But at 5.35%, you’d pay an additional $23,320 in interest over the life of the loan.”
Always get multiple quotes and ask for referrals from friends and your agent.
- Biting off more than you can chewDon’t just consider your mortgage payment when deciding how much home you can afford. You must include every additional expense that will be required to maintain your home. Such expenses include: insurance, pest control, utilities, lawn care, yearly maintenance and upkeep, and more.Also, it is fun to look at fancy homes outside of our price range, right?Well, yes and no.
It is fun at the moment, but you risk tempting yourself with something you can’t afford. Many first-time homebuyers stretch themselves beyond their means in order to buy the “dream.”
Be a realistic and wise shopper and talk to your Buyer’s Agent about what you want and what you can afford, create a realistic budget that won’t overburden your family, and make a purchase that won’t hinder you in the future.
- Compromising on the Important ThingsKnow what you want and don’t compromise. Don’t get a three-bedroom home when you know you’re planning to have kids and will need four bedrooms. If you need an office for at-home work, make sure the home you purchase has a room that can be used as office space. Don’t buy a zero lot home if you want a large yard one day for kids to play in.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.Another thing people often compromise on is getting the home inspected. Whatever you do, do not become emotional about a property prior to inspection. A full inspection can help you avoid purchasing a money pit or a major headache. Remember . . . know the facts before you buy.
- Not Thinking About the FutureIt’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. Some questions you should ask about your prospective property include:
- What kind of development plans are in the works for your neighborhood in the future?
- Is your street likely to become a major street or a popular rush-hour shortcut?
- Will a highway be built in your backyard in five years?
- What are the zoning laws in your area?
- If there is a lot of undeveloped land? What is likely to get built there?
- Have home values in the neighborhood been declining?
Buying a home is the largest purchase that most people will ever make, which is why it should be done with much careful consideration. Give us a call today and we would be happy to help you avoid these mistakes as you look for your dream home.