Buying a home for the first time is equal parts exciting and scary. You’re treading into unknown territory and are susceptible to making all sorts of mistakes. Being a new player in the real estate market does not excuse you from committing blunders that would have otherwise been prevented by planning and research.
Avoid these deadly sins and spare yourself from a hellish home purchasing experience. Not getting preapproved for a loan, you may have a preconceived notion of what you can afford. Unfortunately, this may not match what the bank is willing to lend you. Poor credit and unstable income could lead to getting a much lesser amount or really high interest rates. Get preapproved for a loan so you’ll know exactly what range you can qualify for.
Keep in mind that there’s still a chance that your loan will fall through even after you’ve been preapproved. This usually happens when you do something that has a direct and negative impact on your credit score.
1. Skipping the home inspection
You might think that having a home inspected is an unnecessary expense. After all, leaky pipes and broken windows are not difficult to spot.
A home can look totally liveable but may have a load of underlying problems. It’s these seemingly invisible flaws that could cause accidents when you move in. A professional will be able to spot these dangers early on, saving you from bodily harm and possibly thousands of dollars in repair costs.
2. No ready cash sources
Home buying can be expensive. On top of the down payment, you’re supposed to shell out money for expenses that typically fall under closing costs. These include lawyer’s fees, insurance, loan processing charges and much more. Make sure to find out how much you’ll be charged (in total) for closing costs and prepare for it. Monetary gifts from friends and relatives, credit cards, and grants are just some of the fund sources you can use if cash on hand is limited.
3. Letting your emotions take over
Amy Mizner, a principal of Benoit Mizner Simon & Co., says that in a competitive market, a seller is most likely to sell their house to someone who (appears) to really love it. If you want a property bad enough, it’s best not to fixate on the smallest problems. While it’s important to note cracks on the walls, complaining about them endlessly to the listing broker could cause you to lose out on the deal.
It’s always wise to keep your emotions in check during the entire home purchasing process. There will be times when you get too attached to a house or become frustrated by the amount of paperwork that needs to be submitted. When you experience this, pull yourself back into that objective state. This will allow you to think clearly and make more sound judgments.
4. Relying too much on the internet
Getting knowledge on home loans and market rates is important. However, it is never a good idea to rely solely on the internet for information. It’s recommended that you check with the city or county where you intend to buy a home to see if you qualify for government-backed loan products like the FHA or VA loans. Additionally, talking to a lender in person can greatly help demystify the loan application process.
5. Not getting professional help
Never think that you can successfully navigate the real estate market on your own. Just like home inspections, you’ll need to hire a reputable agent or broker to find a house that matches your needs and income. As you are making what is possibly the single largest investment of your lifetime, get it done right. Finding a buyer’s agent who can offer truly independent advice can be difficult so hiring a lawyer to explain the technicalities for you could prove highly useful. Your lender of choice could make the difference between getting a good deal on a home or not. Thus, it’s crucial to find one that’s well qualified and experienced. Click on the orange button at the bottom of this page to get matched with a lender in your area.
6. Being Too Picky
Like anyone buying a home for the first time, you’re going to be idealistic. You have an image of what your dream house is going to look like. Unless you’re planning to build from scratch, be willing to compromise. List down all of the characteristics you want in your future home and decide which of these really matter to you.