Home ownership is as American as apple pie. Looking at homes for sale, and then making that decision to buy a home, is often seen as the quintessential symbol of achievement. It can symbolize an individual’s own accomplishments or a person’s patriotic dedication to his or her country. Either way, buying your first home isn’t always easy as you may think and the dream can quickly turn into a financial nightmare, especially for first time homebuyers.
Visiting all the homes for sale may end up be the easiest part of your journey into home ownership. Here are some common mistakes people make when purchasing their first home.
- Being unaware of how much you can really afford. Many unexperienced homebuyers spend a lot of time researching homes for sale — comparing kitchen layouts, backyard square footage and closet space — but then they end up spending little time researching their financing options. Without first realistically determining which houses you can afford, you risk falling in love with one you can’t. A potential way to avoid this problem is to plan to start off buy talking to a qualified lender early on in the process. Get preapproved for a mortgage and know where you stand financially.
- Assuming foreclosures are great deals. You should assume that because the previous owner owed $450,000 on a house before a foreclosure occurred that the home is worth that much in the moment. Values can slipped significantly so you may not be getting the bargain you think must come with a foreclosure. Also, some homes owned by lenders or banks have been sitting vacant for months. They may have been vandalized during that time or unexpected problems occurred during the vacancy. That may mean extensive renovation or repair. Weigh the costs of fixing up the property against the savings you’ll may reap by buying a lower-priced foreclosed home.
- Underestimating the costs of owning a home. Every home requires maintenance. Whether it’s rusty pipes or a leaky roof, things can – and will – go wrong and things will eventually need to be fixed. Many homebuyers don’t anticipate the additional costs for home repair and maintenance. Be sure to consider the age of your new home before you purchase and research how well it’s been treated by the previous owners. Be prepared to set aside a small percentage of the home’s purchase price annually for necessary repairs.
- Skipping the inspection. Many first time home buyers spend considerable time visiting homes for sale and often experience fatigue when it’s time to make the purchase. As a result of their fatigue they often make the decision to skip then inspection. Again, a common mistake for first time home buyers. Before signing anything, hire a professional inspector. Buying a house without an inspection is extraordinarily risky because major problems could exist with the plumbing, the electrical wiring, the roof or even the foundation. An inspector can identify problems before the closing. If you buy a house and decide to skip the home inspection, you become financially responsible for any problems that arise after closing.
- Not Working With a Realtor. You don’t need a realtor to buy a house but before disregarding the importance of having a realtor, first time home buyers should understand that the seller’s agent naturally has his or her client’s best interest in mind. They will offer you advice and they will answer your questions, but ultimately, this realtor is present to serve the seller. People purchasing a home should have their own realtor. Having your own realtor means you have something that can help you through the entire home-buying process. They can negotiate your bid, counter an offer, organize the closing process, and much more.