Buying a home for the first time can be an exciting and intimidating prospect. You want to feel hopeful anticipation while trying to avoid rookie mistakes. For this reason, a knowledgeable Realtor will be your ally in your home buying journey. It’s essential, however, to be aware of the common missteps that first-time homebuyers are prone to making.
Mistake # 1: Focusing on perfection
Buying a house is a big life decision. It’s understandable for anyone to feel that they should get the absolute best. However, being laser focused on finding that perfect home can mean spending months on end searching in vain. Or spending more than you should for a home that ticks every box.
Creating a wish list is crucial, but it’s equally important to be realistic about your options given your budget. For instance, a home may require cosmetic updates, but the upside is that there are no structural issues and it’s located in a family-friendly neighborhood. Identify your non-negotiables and be ready to give up some of your wants.
Mistake # 2: Underestimating the total cost of homeownership
There’s more to buying a home than saving up for a down payment and making your monthly mortgage payments. You have to consider the costs of owning a home like repair and maintenance, property taxes, and mortgage and homeowners insurance. Maintenance and repair alone usually cost over $2,000 per year.
So before you fully commit to purchasing a home, look at the full spectrum of homeownership and carefully consider if you’re prepared to take on the financial responsibility.
Mistake # 3: Looking at homes without first talking to lenders
It can be hard to resist going to home showings or touring homes online once you’ve decided to buy a house. If you don’t know exactly how much house you can afford, you may be setting yourself up for disappointment.
Moreover, don’t just talk to one mortgage lender. Explore all your options and shop for the best interest rates, especially now that they’re predicted to rise in 2022. Once a lender pre-approves you for a mortgage, you are more likely to be taken seriously by sellers. It can also be your edge over less-prepared buyers.
Mistake # 4: Not knowing the difference between pre-qualification and pre-approval
When you start approaching lenders, many will offer you a mortgage pre-qualification, which means passing an initial criteria that qualifies you for a loan.
Aside from pre-qualification, you’ll want to focus on getting a mortgage pre-approval, which involves a thorough examination of your credit and income history. When securing a pre-approval, your lender will indicate the exact amount you can borrow to finance your home.
Do take note that some sellers only transact with pre-approved buyers.
Mistake # 5: Allowing emotion to take over
It’s natural to feel a range of emotions when buying your first home. But when you’re making critical decisions during negotiations, it’s important to keep those emotions in check.
If you let emotions dictate key buying decisions, you may end up bidding yourself out of the running (because there’s no way you can back up your bid) or buying something that you didn’t budget for. If you’re the eager beaver, you may mistakenly grant a seller’s request to waive contingencies (appraisal, inspection).
This is where a real estate professional becomes invaluable. They help you stick to your budget and keep a level head during key moments in the home buying process.
First-time homebuyer concerns? Consult David DePaola & Company Real Estate
To learn more about avoiding common homebuyer mistakes, get in touch with proven New Jersey agents from David DePaola & Company Real Estate. Call us at 609.731.0581 or send an email to david(at)depaola(dotted)com.