The process of buying a home can lead to plenty of stress. There are factors and variables that contribute to complications and bumpy roads on the way to closing on a home.
Needless to say, there are many mistakes first-time home buyers make. Some are minor, some are costly and some even lead people to purchase a home that is completely wrong for them. The important part of this is understanding the common mistakes before signing on the dotted line.
Luckily, all of these mistakes are avoidable if you know what to look for.
Looking for a Home Before Getting Pre-Approved
The home buying experience should be exciting and fun. There will be enough challenges along this journey, so do not start off on the wrong foot! When you look around before being pre-approved, you may be surprised that the homes you are looking at may be outside of your budget.
Getting pre-approved for a mortgage helps home buyers in a few ways. It ensures they have the financial ability to purchase a home, helps them understand how much home they can afford and shows sellers and real estate agents they are a serious shopper. Pre-approval holds weight and brings you from mindlessly scrolling through Zillow to actually taking steps to getting to the closing table.
Right now, the market is HOT and moving quickly – without a pre-approval, you may miss weeks in the process because you’re left having to scrounge for a pre-approval. Sellers will accept offers from pre-approvals or approved budgets, just to keep their own schedules moving quickly.
How can this be avoided? It’s easy: get pre-approved right when you plan to search. Your real estate agent will help you find lenders and experts that will provide you options that work best.
In the meantime, instead of looking at home listings and attending open houses, start by making a list of what you want in a home. Write out the must-haves, nice-to-haves and deal breakers. This list will come in handy once you’re pre-approved for a mortgage and can shop for homes – in your correct price range.
Unrealistic Views about Repairs
When buying a home, there is a high chance that during the inspection there will be problem areas that need to be addressed. Sometimes repairs can actually stop a transaction if the problem is persistent or too large. Some examples include roof repairs, foundation repairs, or issues with plumbing.
However, one big mistake potential home buyers make is expecting the sellers to fix everything prior to closing.
Donna Concannon of NSB Homes says: “Repairs are a consistent give and take between sellers and buyers. Both sellers and buyers need to keep an open mind and have flexibility when dealing with repairs needed and unforeseen problems that inevitably arise when buying or selling a home.”
The solution for this problem is to budget a small fund for repairs and be willing to offer partial payment for larger fixes. The reality is that this market is a seller’s market – don’t risk losing your contract if you are not willing to assist the seller if push comes to shove!
Overlooking First-Time Home Buyer Programs
By overlooking first-time home buyer programs, you could be missing out on the assistance you need, causing you to wait longer to purchase a home or decide not to move on in the process.
Many states and cities provide first-time home buyer programs and grants specifically for residents of the area. Take the time to learn more about these from your local government or visit our post on first-time home buyer loan programs.
Anew bipartisan bill in the House of Representatives, called the HELPER Act (or Homes for Every Local Protector, Educator and Responder) aims to help teachers and other first responders who kept things going during the height of the COVID-19 pandemic by providing them with a one-time, down payment-free mortgage.
Ultimately, if these programs are available and apply to you… take them! These loan programs and grants are available to make owning a house more affordable and achievable for many people.
To understand your options in Florida, click here.
Using Your Savings for Down Payment
Our #1 piece of advice: do not drain your savings for a home! If you don’t have extra money set aside to handle these costs – or any other emergency expenses – you could put yourself in serious financial straits, causing you to accumulate more debt, miss payments or go to collections.
Putting money aside can be difficult in the current climate, but it is crucial you decide on if this is the right time to purchase your home. You’ll want to keep your savings account intact, handling the financial stress only if you have the means to.
One of the biggest issues we see is that people go “all-in” and tap themselves dry to afford homes and this leaves issues during the move-in process, the renovation processes (or repairs), and the adjustment to paying a mortgage.
Closing Statement
First-time home buying is a complex process with many potential pitfalls, but ultimately, it can be a good financial and personal decision for those ready to make the commitment. There are so many factors and things to consider that one blog post can not cover them all. Now that you are equipped with some knowledge on the common mistakes, make sure to start your home buying process with a team that is here for you. Contact us today to get started!