Every year, millions of Americans buy a house for the first time. This is called being a “First-Time Home Buyer” and it can be a very exciting time in your life. Your family can enjoy the new space together on many occasions. The problem with this concept, though, is that there are hundreds of mistakes that you could make during the process.
We want to help reduce some of these mistakes so that you don’t overpay or miss out on something important that could cost you a lot of money later on. Here are 5 big mistakes to avoid when buying a house for the first time:
Not Doing Enough Pre-Purchase Counseling & Research
As a first-time homebuyer, you must fully understand how buying a house works before starting the process. Without thorough research beforehand, there is no good way to determine if you should purchase a particular property and how much you can actually afford. Most people do not even know what they should be looking for when searching for their ideal homes. You cannot expect to pick up the phone and start calling real estate agents after finding the perfect place to live. Instead, use free housing counseling to learn about the market, understand the price range, see what you can comfortably afford with your income, find out what’s needed, see an example of closing documents such as a HUD statement, and create a budget accordingly.
Expecting Things to Go Smoothly
When purchasing a home, there will always be glitches here and there. If you think you will walk through the front door and see your dream home waiting for you, you are setting yourself up for failure. Beforehand, you need to realize just how stressful the whole process gets. Realize that things won’t go smoothly at all times, but you shouldn’t lose hope. Instead, try to work with the situation instead of against it.
Putting Too Much Faith in an Agent/Broker
Real estate industry professionals call themselves experts because of their knowledge and experience. However, this does not mean that they are completely infallible. Most of them are highly skilled at what they do, but it doesn’t mean they will necessarily advise you well. They have an interest in selling houses, which means they have a vested interest in making sure that they sell the properties as quickly as possible. On the flip side, they might tell you that you need to pay too much for a specific property to make you spend more cash than necessary. Make sure you read reviews online for an agent who seems overly aggressive in trying to close a deal immediately.
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Using Up All Your Savings on a Down Payment
One of the biggest blunders that first-time buyers often make is spending all their money on the down payment. People assume that getting 20% of the cost of the home’s total value as a down payment is the best thing you can do. While it certainly helps, it isn’t the only thing that matters. It would help if you also considered other aspects such as mortgage payments, closing costs, maintenance fees, and insurance. These things add up quickly; unless you already have a large sum of money saved, you may end up paying more than expected.
Being Too Focused on the Location
It can be tempting to choose a location based solely on proximity to schools, public transportation, retail stores, etc. However, this choice should never come at the expense of the family’s financial health. Make sure you focus less on where the amenities are located in terms of places you want to visit and more on how much space you need to fit your furniture comfortably. Also, make sure that you look closely at the property’s overall condition before committing yourself to it.
If you follow these tips, you’ll be able to avoid many common mistakes and stay focused on the important stuff throughout the entire process. Buying a home is definitely the largest purchase you’ll probably ever make. You want to make sure you understand everything about the entire home buying process and that you’re making well-informed decisions all along the way. Buyer’s remorse is real, and you don’t want to experience it. Reach out to a nonprofit housing counseling agency like AdvantageCCS and ask about their free housing counseling services. You’ll be so happy you did!