Posted on: 29 September 2017
Making the decision to buy your first home will be exciting, but you may not be prepared for the different physical, emotional, and financial obligations of this decision. You may contact an agent when you see a property that interests you, but other steps should be taken before you begin searching for your first home. By avoiding a few common mistakes, you and your agent can find you a first home that will not leave you in physical, emotional, or financial distress.
Not Getting a Preapproval
Many first-time home buyers scour online listings to schedule showings once they decide it is time to buy. This should never be the first step when buying a home. Contacting a lender to get a preapproval BEFORE looking at potential homes is essential.
During the preapproval process, the lender will look at your credit report, income statements, and tax returns to determine how much house you can afford to buy. The amount of home you can purchase will be based on your income versus how much debt and other expenses you currently have.
A preapproval letter prevents you from looking at homes you cannot afford, and this document from your bank will show sellers and agents you are ready, willing, and able to buy. This will help sellers take your offer seriously if and when you find a home that is in your price range.
Forgetting Other Expenses
Even first-time buyers know they may need some sort of down payment to get a mortgage on a home. This down payment will depend on a few factors, including credit score, sale price, and the specific type of loan. However, you may not be familiar with or you may forget about other expenses that will be needed when buying a home.
Before closing, you will need to pay for an appraisal and inspection on the home. You will also need to pay attorney and homeowner's association fees, if applicable, at closing. Property taxes and homeowner's insurance will also be an expense to budget for before closing. While these are prorated according to the time of the year you buy the home, taxes and insurance are expenses you must prepare in advance for.
Skipping the Inspection
If you have forgotten to budget in the cost of a home inspection, you may choose to skip it. In addition, many buyers believe new homes do not require a professional inspection. Unfortunately, skipping a home inspection may end up costing you a great deal of money and stress in the future.
Inspectors are licensed and skilled to check homes for serious and minor issues. Plumbing, electrical, heating and cooling, framing, and the roof are all inspected closely. Since repairing or replacing these systems and parts can be costly, knowing there may be a problem before buying the home is smart.
Even if you are buying a brand-new home or you are an experienced and knowledgeable contractor, you should never skip a home inspection.
Making Low Offers
Once you have your preapproval, saved enough money, and found a home you love, within your budget, that has passed an inspection, you are ready to make an offer. However, making a low-ball offer on the home you want could be devastating.
Sellers who receive offers well below their asking price may decline without even countering. If you make a low offer in the hopes of buying the home a few thousand dollars less than asking, you could risk losing the home.
Buying your first home should be taken seriously. With proper research and planning, you can avoid the common first-time home buyer mistakes real estate agents see every day.Share