Home Buyers

9 Home Buying Mistakes First-time Homebuyers Must Avoid

February 13, 2021

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9 Home Buying Mistakes First-time Homebuyers Must Avoid

You would be very excited when buying a home for the first time. You're making such a big step in your life, have a hefty amount to make the down payment, and are excited to move into your own living place. I'm excited for you. But have you considered the home buying mistakes first-time homebuyers often make?

I'm glad that you've found us before making this big move. Here, you'll get a list of nine common mistakes every homebuyer should avoid and tips to avoid these mistakes.

Not Managing Finances

Mismanagement of finances is widespread among first-time buyers. The mistake home buyers often make is that they don't know what do they afford? Or don't care for their credit score. Or don't apply for mortgage pre-approval.

To avoid these mistakes, follow the below-given tips for managing your finance:

  • Set Your Price Range - don't waste your time trolling for houses you can't afford. Set a price range based on your requirements and stick to it for better research and decision.
  • Maintain a Good Credit Score - long before you plan to buy a home, you should start maintaining your credit score. The basic rule is to pay the debts on time and don't overuse your credit card limit.
  • Apply for a Mortgage Pre-approval - it helps set a borrowing amount and interest you would be paying.

Read more: 3 Things to Consider When Buying a House

Ignoring the Neighbourhood

It's good that you have managed your finances. But are you flexible in choosing your neighbourhood?

Choosing a locality has both financial and non-financial outcomes. A newly-developed neighbourhood may seem peaceful, but what are the prospects?

While choosing the neighbourhood, consider answering these common questions:

  • What are the future development plans for the area?
  • Is it going to be a rushy area in the future?
  • What are the local zoning laws?
  • Is that a friendly neighbourhood where your children or grandchildren could play?
  • Is buying a home in this (under consideration) locality deemed profitable in the future?

Ask all about the neighbourhood and buy the house only if you get satisfactory answers.

Not Incorporating the Economics

Buying a home requires additional unforeseen and uncalculated expenses, including closing fees, taxes, and inspection fees.

The closing fees could be distributed between the lawyers' fees, land transfer taxes, and realtors' fees.

What expenses would come with the homes' price is best identified when you talk to your realtor. This brings us to the part when people ignore hiring a real estate agent.

Not Hiring a Real Estate Agent

With the advent of technology, it's relatively easy to search for a home of your choice. You have plenty of portals showing a massive list of houses in your locality with all the features and prices you need to know. And you may skip the idea of hiring a professional's assistance and save some bucks.

But this isn't true. Every homebuyer needs a professional's help. And a real estate agent near you is your right companion.

These real estate agents are qualified professionals. They know the ins and out of the real estate market. And are there to make the buyer's journey smooth.

These professionals will help you find the right living place and guide what is required during and after the buying process.

Not Looking Under the Hood

If you opt for a listed house, chances are it needs some fixes and repairs. There's nothing terrible about it. This issue is when you don't look for problems in every nook and corner.

It's okay if you find some minor fixable issues. But don't ignore it too much. It could result in hefty fixing and renovating expenses later at some time.

While your realtor would help you identify the problems, you still need a home inspection from a professional.

Not Acquiring Services of a Home Inspection Professional

Since homebuying is a decision of a lifetime, you would be making some big and small expenses throughout the process. Don't get scared. Your initial expenses would soon pay off when you compare the benefits of owning a property.

Home inspection service providers are also qualified, professionals. When you hire their services, they would look under the hood for you, go in the dark basement, and investigate every corner to find if the house is worth buying or not.

Offering Low in a Hot Real Estate Market

According to experts, spring is the best time of the year to sell a house. This is usually a buyer's market. You could play the odds of offering a low price for a home. But offering a low price in times of a seller's market is not a good idea.

In a seller's market, inventory for listed homes is low, which means there are more buyers than sellers. This is the time when you must not negotiate beyond a certain limit.

This is again typical mistake rookies make and lose the deal. Since you have a professional hand beside you, you would not be making this mistake. Instead, you would score the deal with less pressure.

Read more: A Guide to Understand the Best Time to Sell Your House

Not Reading the Contract

This is one of the most common mistakes we all make everywhere. You may think these hefty documents are all about you. But in fact, these are also about the other party(s).

You must read every document you encounter during the home buying process. These documents will not only guide you on what the terms are but also your rights and obligations.

The simple tip to avoid this mistake is to read carefully every document and don't sign off because it's written there. There may be some terms you could negotiate and revise as required.

Delaying the Purchase

The real estate market is one of its kind. It's almost always rising. That means a delay now could result in a surge in price tomorrow.

The best tip is to read the real estate trends from experts and study CREA's housing market stats now and then.

The Bottom Line - Buying Home is Now Easier than Ever

When you buy a home, you mustn't just look at the tips to buy a new home. It would be best if you also consider the most common home-buying mistakes. Know the tips and the mistakes would equip you well, and you would be able to make better decisions.