6 Mistakes First Time Home Buyers Make and How to Avoid Them
Buying your first home may be amazing and exciting. But it can also be scary. Mistakes are being made all the time by first time home buyers. And that’s OK: no experience has to be perfect in order to be amazing.
However, some mistakes are costlier than others. Here are the most common ones, along with tips and tricks to help you avoid them.
Top Mistakes First Time Home Buyers Make
Buying a too Expensive Home
Among the most common mistakes made by first time home buyers, purchasing houses that are too expensive for them ranks at the top of the list. The right cost for our desired home should be dependent on your debt-to-income ratio (DTI).
In most mortgages, the maximum DTI ratio is 43%. However, the recommended DTI is generally around 36%. It is important to remember that there are other costs related to mortgages, such as property taxes, insurance, landscaping and HOA dues. Having ownership of a home is different from renting, as maintenance solely depends on you.
In other words: even if the paperwork shows that you can afford the house, it doesn’t mean it won’t be tight for you. Plus, you can spend decades paying that mortgage – be sure you can afford it in the long run and even in an unstable economy.
Buying The Cheapest Home You Can Find
Yes, buying a home that is too cheap can also be a mistake! In such a case, you may outgrow the house too quickly and end up having to move again soon.
Sometimes first time home buyers don’t think ahead. Do you want to start a family? Do you want to grow your existing one? If so, can the cheap house you’re buying accommodate your entire family?
I’m sure you’ve heard this saying: “it’s too good to be true.” It goes for houses, too. Hidden flaws, huge property taxes, infestations or a bad neighborhood that looks friendly during the day are just a few of the bad surprises you can have when buying a home that’s well below market average.
Not Hiring a Realtor
I know what you’re thinking: do everything on your own and save some money. Sounds good when you put it this way. But the truth is that not hiring a real estate agent can end up costing you a lot more.
An experienced real estate agent knows how to navigate the buying process much faster. Plus, if you choose someone that knows the area, their advice can be invaluable in helping you choose the best neighborhood.
Lastly, a real estate agent can help you with negotiation tips that could shave thousands off the initial asking price and recommend trusted evaluators and inspectors.
Buying the House with Your Heart
That feeling when you find the perfect house, the one that instantly lets you dream of the life you’ll have is amazing. All the colors are perfect, the furniture is exactly what you would have picked out and the yard is perfect for the swing you’ve always wanted.
However, a house is not just a pretty place. It’s a long-term investment. Avoid falling into the trap of a perfectly staged home and think about your ROI should you consider to re-sell it in a couple of years.
Life is surprising and, even if you can now see yourself living there forever, you never know what job opportunity lies around a far corner. Give yourself room to grow.
Not Shopping around for the Perfect Lender
It is recommendable to apply for loan offers from at least four to five lenders. Comparison of the interest rates and the closing costs can aid in ensuring you acquire the best rates for your mortgage.
Yes, this means more paperwork for you and more time invested in the pre-purchase phase. But it also has the potential to save you thousands of dollars.
Not Conducting Your Research Properly
Purchasing a home blindly may prove to be a huge mistake. Falling in love with the first house you see is ideal, but it doesn’t mean you shouldn’t look at others. At the very least, think will give you some negotiation leverage.
Plus, even if the house seems perfect, be sure to hire an inspector to look for hidden flaws and check every appliance and room in it. Also, speak to the HOA and some of the neighbors to get a better idea of how safe the area is.
Some of these mistakes are easy to avoid and simply require a bit more research. Others are quite tough – not choosing a house with your heart may even sound impossible. But now that you know of them, you can always ask for help. Choose a real estate agent you can really trust and they will ensure that you buy a home that fits your dreams, your budget, and your long-term expectations.
We would love to be your first choice if you’re a first time home buyers! Give our office a call or contact us today! Pinnacle Property of Montana loves to make the process easier for you, so you get to love your new home faster.