5 Common Mistakes of First-Time Homebuyers – and How to Avoid Them
Looking for your first home can be a daunting task. Rookie homebuyers face new vocabulary, a myriad of questions, and, of course, a significant financial investment.
The often-overwhelming nature of one’s maiden voyage into real estate can hamper decision-making and drive unnecessary stress. But with a little education, planning, and market understanding, first-time homebuyers can navigate their home-buying journey with increased confidence and smarts.
Mistake #1: Not understanding what you can – or are willing – to afford
For the vast majority of first-time homebuyers, making a six-figure purchase is a new experience. And far too often, first-time buyers waste precious time looking at homes beyond – or, in some cases, below – their price range.
While digging into finances isn’t the most enjoyable of experiences, it’s a critical early step. Get a handle on your finances and what you are comfortable paying by tallying current expenses and getting pre-approved for a mortgage.
Mistake #2: Overlooking additional expenses
Homeownership comes with a litany of expenses beyond the mortgage payment. From taxes and homeowner’s insurance to home furnishings, rookie homebuyers who neglect to account for additional expenses can quickly find themselves stretched thin.
Gather information on local taxes, get quotes on insurance and closing costs, and create a realistic budget for home goods and maintenance needs.
Mistake #3: Compromising on the important things
First-time buyers frequently fall into the trap of insisting on having everything or letting rather trivial wish-list items derail an otherwise promising deal. It’s important to know what really matters and the true non-negotiables.
Compromise is commonplace in homebuying, so create a list of wants and needs and prioritize accordingly. Then, honor that list while exploring homes.
Mistake #4: Failing to consider the future
Some rookie homebuyers are so focused on the present that they overlook the future. While no one has a crystal ball, some educated assumptions can inform home choice. Perhaps a potential in-law situation makes a first-floor suite attractive. With the potential of kids looming in the near future, schools gain added importance.
Consider where you might be in 5-10 years and make thoughtful, forward-thinking decisions about your home choice. Also, research the community and town to understand what’s in the pipeline. Are town leaders contemplating a new school? Is a sprawling apartment complex in the works for that nearby vacant field?
Mistake #5: Thinking a new home is beyond your reach
The real estate market is full of options and first-time homebuyers frequently think they’re confined to the resale market. While existing properties might carry a lower price tag, potential renovations, repairs, and maintenance can consume one’s finances.
New home construction covers the entire pricing spectrum. Be educated about your options and tour promising new home communities. Ask questions about standard features, upgrades, and warranties to better understand the total investment.