Mistakes If you are getting ready to buy your first home, it is important to educate yourself as much as you can about the process. Even if you are working with a real estate agent, you should have a good grasp of how the home buying process works. An important part of that is learning which mistakes you should avoid. The list below outlines thirteen of the most common issues that homebuyers run into. Familiarizing yourself with these mistakes can help keep you from making them yourself. 13 Common Mistakes First-Time Home Buyers Make.
The home buying process is a lot more complex than most people think. From dealing with complicated contracts to figuring out financing, many issues need to be addressed. A good real estate agent can act as a guide, walking buyers through the process so that they take all of the right steps along the way. Choosing the wrong agent can quickly cause things to go awry. The same holds true for first-time homebuyers who don’t work with a real estate agent at all. Instead of leaving things to chance, it makes sense to work with a knowledgeable real estate agent who is familiar with all of the legal requirements associated with buying a home.
One of the worst things a buyer can do is immediately fall in love with a home the moment they walk through the door. No matter how beautiful a home is, there are always problems lurking just below the surface. It is important to take a step back and thoroughly evaluate the property before deciding if it is the one. Any buying decisions should be based on logic and research rather than being based on emotions.
A home’s location plays a key role in how easy it is to sell in the future and how quickly its value goes up over time. The location can also affect many lifestyle factors ranging from commute times to personal safety.
Even in a hot real estate market, buyers should never make an offer without making it contingent on an inspection. Problems with a home aren’t always obvious. Nothing is worse than buying a property only to wind up having to throw thousands of dollars into fixing hidden issues. Having a home inspected before buying it is the best way to ensure that it doesn’t wind up costing more to upgrade or repair than it is worth.
When buyers apply for mortgage loans in Texas, the bank approves them up to a certain dollar amount. That doesn’t mean that they should spend that much money. This is particularly true for first-time buyers. There are a lot of extra fees associated with homeownership that people often fail to take into account. This includes everything from property taxes and insurance to closing costs and homeowner’s association dues.
Even the most perfect home can turn into a bit of a nightmare if it is in a bad neighborhood. From noisy neighbors to excessive traffic, the neighborhood outside can have a big impact on a new homeowner’s quality of life. That is why it is so important to carefully explore the neighborhood, really getting to know it before buying a home.
The worst possible time to make a major purchase is during the house buying process. Large purchases can negatively impact credit scores, causing them to drop. Before the real estate transaction goes through, the bank will pull the buyers’ credit report to make sure that everything looks good. If there are any new, large purchases on the report, it could cause the loan to fall through.
First-time home buyers need to have good credit if they expect to buy a home. Trying to get approved for a mortgage with a low credit score is practically impossible. Higher credit scores also usually result in lower interest rates, which can translate into a lower monthly mortgage payment.
Without a preapproval letter in hand, touring homes is relatively pointless. Sellers are less likely to take buyers seriously if they have not already been preapproved for a loan. Buyers also run the risk of falling in love with a property only to find that they can’t get a mortgage to buy it. The best way to avoid these problems is by getting pre approved before looking at homes.
It is easy to fall in love with homes that are beautifully staged with attractive fixtures and surfaces. One of the biggest mistakes first-time homebuyers make, however, is focusing so much on these details that they fail to look at the basic structure and layout of the home. Instead of just looking at the decor, it is important to look at details like the home’s plumbing and electrical systems, the HVAC system, the windows, and the roof. Homes shouldn’t just be nice to look at – they should also be safe and comfortable to live in.
When it comes to down payments, bigger is always better. At a bare minimum, buyers should save up a down payment that is at least 10% of the purchase price of the home. Ideally, however, they should try to save 20%. Services like Mint make managing money and saving for large goals easier if you need a little bit of help.
In the world of real estate, similar homes that have recently sold are referred to as “comps”, which is short for “comparable sales”. Agents look at these sales to determine how much a home is truly worth. Finding comps means looking for properties that are located in the same basic area that is about the same size as the home in question. Evaluating comps near home is the best way to determine its real value. Looking at comps makes it easier for buyers to identify overpriced homes.