To most people, buying the first home is one of the most exciting and important times in their lives. Unfortunately, it can be one of the most stressful experiences.
With so many unknown variables involved in the real estate transaction, first-time homebuyers are prone to making plenty of mistakes as they navigate the complex process.
Fortunately, with these tips, you will avoid repeating the mistakes others have made:
Mistake#1: Not being serious when hiring a buyer’s agent
Negotiating real estate deals can be overwhelming and confusing, especially as a first-timer.
While first time home buyers know the importance of a real estate agent, many of them don’t put much effort into hiring the right one.
Many of them hire an agent because they are a family member or friend. Others hire the first agent they come across at an open house. This is catastrophic!
House buying is a big deal, and you need to have a professional to go over the deal and transactions with a critical eye. The agent must also negotiate on your behalf, so you get a better deal.
When you are looking to buy a house, the first thing you should do is to find a reputable and highly experienced buyers agent. Take time to interview several agents and find the right one.
Mistake#2: Buying a house when you are in debt
Trying to buy a house when you are in debt is like trying to run a marathon with tones of weight chained to your legs. While you will finish the race, you will be too exhausted. You also will take a long time.
Debt takes a toll on your monthly budget, which slows down your home payments. It also stresses you up. Piling a mortgage on top of monthly debt payments such as car loans, student loans, or credit cards is unwise.
To make house payments comfortably, first clear the current debts.
Mistake #3: Underestimating the costs of homeownership
While you won’t be paying rent after buying a house, there are plenty of other bills you have to take care of. In addition to monthly mortgage payments, you will also have a gas bill, oil bill, cable bill, and many others.
While renters also pay these bills, the bills tend to be higher when you have a new home. This is because the new house comes with entirely new bills such as homeowner association fees.
The situation is worse if you bought a house that is way beyond what you can afford.
To avoid this mistake, work with a real estate agent who will advise you on property taxes and insurance policies in the area. To know how much it will cost you to move in, ask to see the seller’s utility bills for the last year.
Mistake #4: Making a small down payment
You don’t always have to make a 20% down payment to buy a house. Some loan programs will enable you to buy a home with zero or 3.5% down.
While you won’t have to save much to own the house of your dreams, going that route is often a big mistake.
When you make a small down payment, you have larger mortgage payments.
While you will need more money to buy your dream house when you hold buying so that you can save, you will be better off as you will make the payments comfortably and with little stress.
To have a clear understanding of the amount of money you need to afford the house you have your eyes on, talk to your bank or buyer’s agent.