Buying your first home can be an exciting time as your life takes a new direction. However, it can also be a scary experience, especially for first-time buyers. It’s the biggest single investment you’re likely to make in your life and you hope nothing goes wrong.
After all, unless you’re incredibly wealthy, mistakes could cost thousands on top of all the other money you’ve already put into the house-buying process. Here are some pitfalls that you can avoid when buying your first home.
🚫 Mistake 1: Not Being Able To Afford It
Many people make the mistake of not knowing what they can afford. You really need to sit down and take a look at all of your monthly and yearly expenses first. Apart from your rent right now, look at your monthly credit card payments, cost of having a car, groceries, other loans and so on. Also take into account any annual payments. Add all of this and subtract the total from your take-home pay and that’s pretty much what you can afford to pay every month on your new home.
Remember, just because a bank thinks you can afford something, it doesn’t really mean that you can. You need to calculate what you can genuinely afford. Consider doing research on the real estate market or hiring expert services to provide you with more information and resources.
🚫 Mistake 2: Forgetting Additional Expenses
Unlike when you were a renter where your monthly payments were pretty standard, there will be additional and even unpredictable payments as a homeowner. Now you’re faced with property taxes, insurance payments in case unforeseen events occur and also repairs, which could occasionally be quite a substantial amount. The ones that will hit you hardest would be roof repairs, a new furnace or replacing your HVAC system.
🚫 Mistake 3: Not Getting Pre-Approved For A Loan
This is an important step that should not be skipped. It also helps the process run much smoother. Before you make an offer on a home, get pre-approved for a loan, otherwise, you’ll be wasting your agent’s time as well as the time of the seller and his or her agent. This is because your bank may not provide you with a loan and even if it does, you may find it unacceptable.
Even if you’ve been pre-approved for a mortgage, you still need to be careful, since it could still not go through at the eleventh hour. This could be due to something you did to change your credit score. In addition, if you had signed a contract, you could lose several thousand dollars as a penalty.
🚫 Mistake 4: Failure To Inspect
As a first-time buyer, you may not realize that inspecting is one of the most important parts in the whole deal. You need to be meticulous and thorough, otherwise, you may find that after you take over the home, one thing after another could milk you of a few thousand dollars that you had not anticipated. Make sure to check the roof, the ceiling, the floors, bathroom fittings, electrical wiring and the windows, just to name a few.
Go over the whole house and check the furnace, heating and cooling systems. If some of these need to be replaced, it will cost you a few thousand dollars. Save yourself from making a huge mistake by getting it inspected properly.
🚫 Mistake 5: Not Hiring An Agent
If you’ve bought property before, or perhaps you’re in the housing market, it might be alright to go it alone, since you may know certain things and can look after yourself. If not, the best thing to do is to hire an agent. Find a trustworthy agent with a good reputation and let him or her know exactly what you’re looking for.
These agents have certain codes of conduct and reputations to uphold. They will protect your best interests and also make sure the transaction goes through as smoothly as possible. A good agent is obviously knowledgeable about the market and trends and can take a lot of pressure off you. An agent will also have a great network of home inspectors, insurance agents and other areas that you will definitely need to use.
Get as much information as possible and never hurry. Don’t buy based on emotion. Don’t buy what you want, but what you need. Even though you may have an agent, make sure to dig deep for some information on your own so that you can also go in with confidence and make the best possible decisions along the whole process.