Are you on the journey to becoming a first time home buyer? Buying a new home is an exciting experience. It is something we all dream about.
However, there are several complex processes involved in buying a home.
Unfortunately, many first time home buyers make mistakes or poor decisions that can be costly in the long run. In fact, this eventually amounts to a loss of time and money.
Buying a home requires that you follow a well-thought-out plan.
A plan will help first time home buyers avoid making mistakes that could turn out to be costly.
In case you are planning to purchase a home, this post is for you.
Below is a list of mistakes that first time home buyers should try to avoid, so they won’t jeopardize their dream of buying a home.
Not Creating a Budget
By not knowing your budget, you will waste your time looking at homes that you cannot afford.
A detailed budget will show you how much you can afford to spend each month on the house payment and other living expenses.
This will help you make a wiser choice when searching. It will also enable you to narrow down your search of homes that only fit into your budget.
Many homebuyers have invested in a property they cannot afford only to regret it later.
A clear budget prevents you from falling into financial ruin by guiding you to find a house that meets your budget.
Not Carrying Out an Inspection
There is a possibility that a house listed for sale could cause you problems in the future.
Some house sellers may put up the house for sale because there are structural defects and they cannot shoulder the costs.
After buying such a house, you will make out-of-pocket repairs, in addition to the selling price, for damages, you had not expected.
No matter how appealing the exterior of the house may be, do not let it convince you into agreeing that all is well with its structure and frameworks.
Take out time to inspect the interior and every other part of the house.
This will avail you the opportunity to discover if the house is in a good state and save you money from making unexpected repairs.
Not Considering the Future
It is impossible to foretell what the future holds but there could be telltale signs that you need to keep an eye peeled out to avoid surprises in the long run.
Before paying for a house, consider the following questions:
- Are there any undeveloped land and if so, what are they considering building on it? Retail stores, student apartments, etc.
- What is the market reselling value of the homes in the neighborhood?
- What are the property and zoning laws in the area?
- Are there any property development agendas in the neighborhood’s pipeline?
Buying It All by Yourself
Not using the guidance and advice of a professional real estate agent is one of the many mistakes that first-time homebuyers make when buying a home.
A real estate agent is trained and use to handling house selling and buying negotiations.
They have knowledge and experience of the price of the houses in the neighborhood.
Real estate agents have the responsibility to help you choose a house that meets your needs.
They have the knowledge and experience to get through the intricacies to reach a deal that will better suit you.
Rather than buying the home yourself, leverage the expertise of a qualified real estate agent.
This will help you get the best deal on home buying.
Some homebuyers would put rationalization on the back-burner and buy based on their emotions.
The seller can easily sweep them away by installing minor upgrades made as a trick to play on their emotions and make them fork out a higher price. Such a home buying strategy does not always pan out well.
To avoid making an emotional mistake, first time home buyers should look for a house that matches their budget does not have any structural damage and something they can add value to.
Take out enough time to research the houses in your area to ensure you are not paying more than you should.
Keep your emotion in check, pull yourself together and buy sensibly.
Looking at Minor Defects
An ugly wallpaper in the living room or the chaffing paint in the bathroom dissuades some buyers from buying a home.
They forfeit the higher value they could get from acquiring the property because of these minor issues that they could have improved.
If the home meets your needs in terms of size, affordability, location and reselling value, then it would probably be best to overlook such defects.
Besides, as time goes on, you can make repairs and upgrade your home, which will still be cheaper than buying a newly built one.
Ignoring Additional Expenses
There are unmentioned expenses that come with becoming a property owner.
As a homeowner, you will be obligated to pay property taxes and put insurance on your home. You will also be your responsibility to make repairs when the need arises.
The type of house you buy determines the type of expenses you make for its maintenance and more.
For example, condominium attracts more insurance premiums and monthly costs than a cooperative apartment.
Not Checking Credit Rating
Mortgage lenders use credit reports as a metric to determine whether to offer you a loan and at what interest rate.
The lower your credit score, the more interest you will have to pay. Generally, the credit bureaus consider any score over 650 to be a “good” credit score.
Even an error on the credit report can ramp up the interest rate. It can even prevent you from securing a mortgage loan.
Before you apply for a mortgage loan, ensure that you have a high credit rating. Also, check for any error that may need to correcting.
There you have it! Above are 8 mistakes first time home buyers should try to avoid when buying a home.
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Home buying is exciting when you avoid any possible mistakes that could be an obstacle from getting a favorable deal.
The house buying errors mentioned above, when avoided, can avert you from stress and loss of money. Come up with a reasonable plan, stick to it and buy like a pro.