There are common mistakes that first time home buyers make when purchasing a home and the list below outlines the top 5 that I’ve seen over the years.
1.TAKING ADVICE FROM FRIENDS AND FAMILY
Every real estate transaction is unique due to the fact that buyers and sellers have varying personalities, circumstances, income, equity positions, debt ratios, credit scores, etc… In addition, the real estate industry and real estate market are constantly undergoing changes, and what was true a year ago, or even yesterday, could be completely different in today’s economic and lending climate. Loan officers and real estate agents that are working in the business every day, have a depth of knowledge, and real time experience with regards to appraisals, market values, seller concessions, and more, which your friends and family do not. Although it’s natural to be nervous and tempted to rely on friends and family, as a first time buyer, it’s important that you trust what your real estate agent and/or home loan agent tells you. And, although it’s wise to get a second opinion in many cases, it should always come from another real estate industry professional, who has the FULL details or your purchase and financial profile.
2.BUYING THE MOST EXPENSIVE HOME YOU QUALIFY
Becoming a homeowner is very exciting for a first time buyer, but it can become a financial burden, if you’re not prepared for the additional costs of homeownership. This is one topic that is perfect to discuss with friends and family, and an area where they can be a great source of advice.
When choosing your firts home consider all of the expenses you will incur, in addition to your monthly mortgage, and be realistic about how much you will have left over for food, gasoline, and even entertainment. The last thing you want to do is to become a prisoner in your own home, even if it is beautiful and everything you’ve ever dreamed of.
3.MAKING LOW OFFERS ON HOMES YOU WANT TO PURCHASE
As a first time buyer, you may be reluctant to offer full price, or above asking price, on a home that you want to purchase. You may also think that your real estate agent is simply trying to make a quick sale, if they urge you to do so. However, the real estate market is moving quickly right now, and desirable properties typically have multiple offers submitted on them due to the severe lack of inventory. With HOMES selling almost as soon as the sign goes up, and prices pushing up slightly, you’re setting yourself up for heartbreak and wasting your time, if you’re not offering a fair amount of money for the property. This is especially true when it comes to standard real estate sales , since the owner is not desperate to sell.
4.NOT MAKING AN OFFER WHEN THEY FIND THE RIGHT HOME
So often first time home buyers are hesitant to place an offer on a home, if they’ve just begun their home search. The problem is that there are many other buyers that have been searching for months already, and the home you love may very well be pending by the time you circle back to it. Yes, it’s important to see what’s out there, and know that you’re making the right decision, but you should try to do this as quickly as possible, if you find a home that you like and suits your needs.
5.LOOKING FOR A HOME LIKE THEIR PARENTS
It’s important to remember that most people do not buy their dream home right out of the gate. Your parents, or other family members and friends, probably started out in a much smaller house, or even a condo. Most likely, they paid down their mortgage over the years, and then traded up to a larger home, when the time was right. As a first time buyer, it may be difficult to lower your expectations a bit, but by not doing so, you may miss out on a great home and the incredibly low interest rates and prices available today in the real estate market.