After years of saving, you’re finally ready to buy your own home—congratulations!
Owning a home is a huge achievement that many people dream of. But before signing on the dotted line, you want to make sure you’ve found the right home for you.
Unfortunately, there are many mistakes that home buyers often fall for. It’s easy to get caught up in the excitement, but if you’re not careful, it can end up costing you a lot of money and lead to problems down the track.
Keep reading to learn some of the most common mistakes made by new home buyers—some of them might surprise you.
1. Overspending
With so many gorgeous homes on the market, it can be very easy to start creeping up into higher price brackets. This is natural as you want the best possible property for you and your family.
However, when searching for a home, it’s important to know how much you can afford to spend and stick within your budget.
There’s no point wasting time looking at homes that are out of your price range. Not to mention, you’ll quickly come to regret overspending when you’re left with a mortgage you’re struggling to pay each month.
That being said, you want to put down the largest possible down payment that you can as the more you can pay upfront, the lower your monthly mortgage payments will be.
2. Falling in Love at First Sight
Although love at first sight is common when searching for homes, don’t make a rash decision based on appearances alone.
A manicured yard, pristine kitchen, or swimming pool can make it easy for us to decide that we’ve found the perfect home. But, behind the lovely curb appeal of a home, there could be major problems waiting.
Never purchase a home impulsively, no matter how tempting it is. Instead, stay calm, gather all of the necessary information, and make an informed decision on how to proceed.
3. Shopping Before You Have Pre-Approval
Pre-approval for financing is an important step as a potential buyer. It lets real estate companies know that you’re serious about purchasing and it also lets you know, as a buyer, how much you can afford.
If you don’t yet have pre-approval, how do you know how much you can afford to spend? Once you know more about your borrowing ability, it’s easier to know which homes are in your price range.
Real estate agents also prefer to show homes to buyers with pre-approval as that way they don’t feel that their time is being wasted. Obtain your pre-approval first, then you can enjoy the fun of open homes!
4. Skipping the Home Inspection
You think you’ve found the perfect home, and everything appears fine. At this point, you may be tempted to skip the home inspection.
After all, you’re about to spend a huge amount of money on a home. Why spend more on an inspection?
However, even experienced homebuyers should never skip the home inspection. A knowledgeable inspector may reveal problems with the home that you never would have seen otherwise, some of which might be deal-breakers.
It can reveal construction that was not done in accordance with zoning laws, termite or insect damage, or mold or carbon dioxide problems.
An inspection is essential for peace of mind before making a purchase. Not only that, but it may be a requirement if you plan on getting homeowner’s insurance after the sale.
5. Neglecting Closing Costs
When budgeting for the cost of homeownership, have you considered closing costs?
Often, we are so focused on saving for a deposit that we put all of our finances toward that goal. However, if you put all of your funds into the deposit, you’ll struggle when it comes to closing costs.
These are generally the fees and costs associated with your mortgage and can range from 2-5% of the amount of your loan.
6. Not Doing Enough Research
Finding the ideal home for you and your family is a big task, so make sure to do plenty of research.
Look into average property prices in the area, the most common style of homes, the school district, parks and recreation facilities, and shopping in the area.
You want to know as much as you can about the current market, housing prices, and the current demand. Look at listings frequently and try to work out how long homes are staying on the market.
7. Forgetting About Resale Value
Even if you plan on staying in your home for decades to come, you’ll most likely want to sell it eventually.
When thinking about purchasing, consider the resale value of the home. Would you be able to sell it fast if you had to? Is it likely to increase in value over time?
One way to think about this is based on location. Certain locations are always going to be an easier sell than others. While a home can always be changed by new buyers, the location is fixed.
If you’re purchasing the home as an investment property, make sure you know the local housing market well enough to later profit from the home.
8. Home Buyers Should Consider the Neighborhood
Have you found your dream home but it’s not in your dream neighborhood?
While it can be tempting to buy based on the home, rather than the neighborhood, you may come to regret this choice.
If you’re not likely to be happy in the new location, it doesn’t matter how great the home is. Consider factors like commute time, local facilities, and access to shopping and dining before committing to an unfamiliar area.
9. Missing out on Homeowners’ Assistance Programs
You may not realize it, but there are many grants and programs designed to help homebuyers. Both federal and state programs are available, so make sure you’re aware of anything you may qualify for.
For example, veterans, low-income earners, and those purchasing in rural areas may all qualify for these loan programs and grants.
Both the Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) have special loans to assist homebuyers, which can make the process more affordable.
They could save you thousands of dollars when purchasing, so don’t miss out.
10. Not Shopping Around for a Mortgage
Take the time to shop around with different lenders when looking for a mortgage. Although this can seem like additional work, you may be able to get a more favorable rate from one lender over another.
A tenth of a percentage may seem like nothing, but over the course of a 30-year mortgage, this is a massive amount of money.
11. Not Budgeting Enough for Renovations
You think you’ve found the perfect fixer-upper, and it’s well below your budget. But, how much will it take to renovate the home to your liking?
It’s easy to get carried away in renovation projects, which can very quickly become more expensive than we planned.
Before purchasing a home that needs work, bring in contractors to give quotes based on the work you want to be done. This way, you’re fully aware of renovation costs before committing to the project.
Or, scale back your goals and only renovate one room at a time, spreading the cost out over a larger time frame.
12. Panic Buying
If you’ve been searching for homes for months, you’re likely to be frustrated and ready to get it all over with.
However, panic buying is never a good idea for anything, but especially for homes.
If you’re not completely sure on a property, don’t buy it as there’s a good chance it will lead to regret. Instead, keep searching and stay calm—you’ll find your dream home eventually!
Although it’s often said that the perfect property doesn’t exist, you do want to be confident that a home ticks most of your boxes before purchasing.
If necessary, you can always find a rental property to move into until you can find the best home for you.
Contact Us
Home buyers have a lot to think about before purchasing their first property, so use the tips above to make the process as smooth as possible.
Are you still searching for your perfect home? If so, contact us today.
We can help you find and search for homes and agents, all in your local area. We also have 3D tours and virtual open houses for local properties, helping you find the best home from the comfort of your living room.
Hommati helps you experience real estate like never before. We look forward to helping you find your dream home.