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Wednesday, 23 October 2019
Agent Resource Center
Agent Resource Center

Five Mistakes That First-Time Homebuyers Make (And How to Avoid Them)

Written by Posted On Thursday, 10 January 2019 20:17

The process of moving into your first home can be an overwhelming and complicated one. There are stacks of paperwork to complete, boxes to pack and unpack and new neighbors to meet, among other concerns. As such, it’s all too easy to become so wrapped up in the myriad, seemingly never-ending to-do lists that these new buyers leave some critical steps unattended to, leading to costly and time-consuming corrections.

 

Today, we’re sharing a few common mistakes that a first-time homebuyer typically makes and how you can avoid them the next time you’re the one handed that coveted set of keys.

 

1. Getting In Too Deep Before Being Approved

Yes, it’s entertaining to browse Pinterest and curate boards of what our dream home will look like. It’s fun to clip out magazine pictures and daydream about the future. Yet, when we do so without first knowing how much home we can realistically afford, we could set ourselves up for disappointment.

 

Before you begin touring open houses and seriously browsing the market for homes, it’s helpful to get pre-approved first. This step will help you avoid the temptation of offering above what a home is worth just because it fits every criteria on your checklist. Get an underwritten pre-approval before you move forward and save yourself the headache (and heartache) down the road.

 

2. Hurrying the Process

It’s easy to become impatient during the homebuying process. After all, this is arguably the most important investment of your life and it’s being slowed down by meetings, reports, inspections, paperwork and negotiations. Yet, resist the urge to speed it up as quickly as possible. Instead, make sure you are thoroughly prepared on your end before you begin talking to an agent about buying a home.

 

This means getting your credit score up as much as possible, saving for a down payment, and making sure your finances and expectations are in place. Then, once you have your initial meeting, ask plenty of questions so you’re always in the loop on where the process is headed and what the next step should be. Being left in the dark can lead to unease and impatience, which can only serve to exacerbate any delays that may crop up. Insead, be proactive and present on your end and stay receptive to any guidance your agent has to offer along the way.

 

3. Failing to Consider the Neighborhood

You fall in love with a home. You adore its ins and outs and, as you’re touring it, you can picture a life there. Yet, the second you step outside of the front stoop, you realize there are plenty of things about the neighborhood that you would change. It’s too loud, too close to a major highway, traffic is too busy, you name it. Homebuyers tend to get so wrapped up in the idea of a home that they fail to consider how that home fits into its surrounding community.

 

No one wants to feel like a prisoner inside their own house. When making your decision on a property, consider both the immediate structure and its external context. In fact, many agents suggest leading with the community or neighborhood, then focusing in on homes that fit your list. Even if one isn’t precisely as you’d like, keep in mind that you can make remodels or renovations down the road. You can’t exactly pick up a home and move it elsewhere very easily.

 

4. Sticking to the 20 Percent Rule

Many first-time homebuyers drain their savings and wreak havoc on their sanity trying to scrap together a 20% down payment on a mortgage to avoid paying private mortgage insurance. If this down payment is something you can afford relatively easily, it’s a wise move. However, it’s not your only option and it’s certainly not work wrecking your finances over. The National Association of Homeowners (NAH) actually reveals that most new homeowners today only apply around 13% down.

 

Look into government-issued loans to see if you can qualify for a lower down payment. In addition, many state and local government programs exist to help you locate housing assistance resources that can help first-time home buyers better manage the finances of this big step. Be sure to read the details of your local plans to learn the criteria and discern how to apply.

 

5. Laser-focusing in on the impossible.

In reality, there is no such thing as a perfect house. What you fall head over heels in love with now will eventually begin to show signs of age, no matter how well you maintain it. There might be an ideal property that includes everything you wanted except for a walk-in pantry or certain square footage. Or, the right acreage might exist, but the home isn’t to your liking. While it’s important to make sure that you’re happy with the final decision, keep in mind that flexibility is key.

 

Seeking a proverbial “unicorn” home can lead to you passing by solid opportunities in the meantime, blind to great chances in your pursuit of the impossible. Remember the value of hard work and be willing to forgive a few minor flaws if everything else checks out.

 

Successfully Navigating the First-Time Homebuyer Market

Ultimately, staying afloat as a first-time homebuyer requires setting realistic expectations. It means planning ahead, being proactive and listening to the guidance of experts. It also means researching opportunities and resources, both national and local, that could help relieve some of the financial burden.

 

By understanding the above-mentioned pitfalls, you’ll be better able to avoid them in the future. Then, you can walk confidently over the threshold of your new dream home.

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