There is too much room for error to get it perfect. While home buyer education can help you get ready for your first purchase, a home buyer curriculum can only take you so far.
Consider bookmarking this page. It lists the most common mistakes first-time buyers make that delay or derail their American Dream of homeownership.
Buying your first home is an exciting adventure, but it can also be overwhelming. As a newbie, it’s easy to make costly mistakes if you don’t know how the homebuying process works.
Here are 16 common mistakes first-time homebuyers make and how to avoid them:
1. Not Starting the Approval Process Early
Getting pre-approved for a mortgage is essential before you start looking for homes This will show sellers that you’re a serious buyer and help you narrow down your search to homes you can afford,
2. Looking at Only One Mortgage Rate Quote
Shop around for the best mortgage rate. Don’t just go with the first lender you talk to. Compare rates from different lenders to ensure you’re getting the best deal.
3, Not Working with a Real Estate Agent
A real estate agent can help you navigate the homebuying process and find the right home for you. They can also help you negotiate the purchase price and closing costs.
4. Buying More Home Than You Can Afford
Don’t overextend yourself financially. Get pre-approved for a mortgage and stick to your budget.
5 Not Checking Your Credit Report
Your interest rate and capacity to obtain a mortgage will be impacted by your credit score. Before you apply for a mortgage, check your credit report for errors and try to raise your score.
6. Waiving a Home Inspection
A home inspection can identify potential problems with the home that you may not be aware of. Don’t waive the home inspection, even if the seller offers to pay for it.
7. Not Getting Homeowners Insurance
Homeowners insurance is essential to protect your investment. Get a quote for homeowners insurance before you close on your home.
8. Not Budgeting for Closing Costs
Closing costs can add up to thousands of dollars. Be sure to budget for closing costs when you’re planning your home purchase.
9. Not Saving for a Down Payment
The more money you can put down on a home, the lower your monthly mortgage payments will be. Aim to save at least 20% of the home’s purchase price for a down payment.
10. Not Understanding the Different Types of Mortgages
There are many different types of mortgages available. Do your research and choose the mortgage that’s right for you.
11. Not Shopping Around for Homeowners Insurance
Just like with your mortgage, it’s important to shop around for homeowners insurance to get the best rate.
12. Not Getting a Home Warranty
A home warranty can help protect you from unexpected repair costs. Consider getting a home warranty when you buy your home.
13. Not Doing Your Research
Before you buy a home, do your research on the neighborhood and the schools. Make sure it’s a good fit for you and your family.
14. Not Being Realistic
Buying a home is a big decision. Be realistic about your budget and your needs.
15. Not Getting Pre-Approved for a Mortgage
Getting pre-approved for a mortgage is essential before you start looking for homes. This will show sellers that you’re a serious buyer and help you narrow down your search to homes you can afford.
16. Not Working with a Real Estate Agent
A real estate agent can help you navigate the homebuying process and find the right home for you. They can also help you negotiate the purchase price and closing costs.
Bonus Tip:
Don’t be afraid to ask for help. There are many resources available to help you through the homebuying process.
By avoiding these common mistakes, you can make the homebuying process smoother and less stressful.
Remember, buying a home is a big decision. Take your time, do your research, and don’t be afraid to ask for help.
Don’t Treat Your First Home As An Investment
Some of history’s greatest fortunes have come from owning property. But, as a first-time home buyer, avoid the approach of the real estate tycoon.
When you’re a first-time home buyer, your new home will be your residence. You will live there and it will the center of your life activities. So, buy a home that meets your household needs today.
Also, the typical homeowner moves every 13 years. It’s unlikely this will be your forever home. You can expect to build equity and wealth in your home, but you may want that money to move-up to your next home.
The happiest homeowners live in homes that meet their financial and emotional needs:
- Their monthly payment is manageable and low-stress
- The commute to work is brief and without traffic
- Their neighborhood is a community with friendly residents
- The local school system is highly-rated and well-funded
- There are parks nearby for running, biking, and outdoor activity
Remember that a good home will appreciate. A great home you will appreciate.
Don’t Only Speak To One Mortgage Lender
According to a Freddie Mac study, the majority of first-time home buyers talk to one mortgage lender only – even as they admit comparison shopping will save them money.
So, why don’t consumers comparison shop? Nobel Prize winner Richard Thaler says it’s because of irrational consumer behaviors.
Thaler’s work says home buyers don’t comparison shop because consumers, in general:
- Search too little for solutions
- Are slow to switch from prior choices
- Become confused by complex alternatives
To avoid this mistake, act rationally. Talk to multiple mortgage companies. Give multiple mortgage applications. Comparison shop to get your best deal.
8 Common Mistakes To Avoid When Buying a House For First Time Home Buyers
FAQ
What is the biggest mistake people make when buying a home?
Which of the following is a common mistake that first-time home buyers make?
Are You making mistakes when buying a house?
Buying a house for the first time can be overwhelming. With so many steps involved, it’s easy for first-time home buyers to make some mistakes. From not saving enough money to not paying enough attention to credit, to simply waiting too long to make an offer, home buying mistakes can seriously impact an otherwise exciting time in your life.
What are some common home-buying mistakes?
A common home-buying mistake is letting your emotions dictate the offer. Instead, only make an offer if you’re really serious about buying a property, and make sure it’s based on comparable sales rather than just how much you like the house. “Ultimately the price should reflect the market value of the home.
What mistakes do first-time home buyers make?
Every year, first-time home buyers venture into the market and make the same mistakes that their parents, siblings and friends made when they bought their first houses. But today’s novice buyers can stop the cycle. Here are 12 mistakes that first-time home buyers make — and what to do instead. 1. Not figuring out how much house you can afford
What should I know before buying a house?
1. Don’t Assume You Need A 20 Percent Downpayment → 2. Don’t Wait To Start Saving For A House → 3. Don’t Forget To Save For Closing Costs → 4. Don’t Buy More Home Than You Can Afford → 5. Don’t Skip Checking Your Credit Report → 6. Don’t Only Speak To One Mortgage Lender → 7. Don’t Ignore First-Time Home Buyer Assistance Programs → 8.