Buying your first home is thrilling, but it can be a little nerve-wracking too. The key to making the process as smooth and stress-free as possible is learning from the mistakes of other first-time homebuyers.
People who've moved through the homebuying process—from looking for homes to planning finances to making an offer—have experienced pitfalls you can avoid. This article outlines the five biggest first-time homebuyer mistakes, along with smart ways to avoid them.
1. Choosing the house over the neighborhood
We all have wish lists when it comes to homes. We want certain things, and when we find them, we may begin to focus on homes and forget about the neighborhood around them. While you certainly deserve to find a home that ticks all the boxes, it's important to consider the neighborhood as it may not meet your needs.
Luckily, it’s easy to avoid this rookie mistake. All you need to do is study neighborhoods in your target area carefully. Look for areas that have the culture and amenities that you want. A neighborhood should match your own values and lifestyle.
It's easier to modify a home to suit your needs than it is to modify an entire area. For example, you can renovate a bathroom, but you may not be able to do anything about the lack of a community center or good schools.
When you keep the quality and livability of the neighborhood in mind as you house hunt, you'll be able to find a home in the right place.
2. Looking for more home than you can afford
First-time homebuyers are often, but not always, in the market for starter homes. Many of us dream of houses with every bell and whistle, but it doesn't help to look for more home than you can afford. It's important to decide how much you want to spend on a home. Qualifying for a large loan doesn't mean you have to use the maximum loan amount. Buyers who go this route and finance a home they can't necessarily afford tend to have little money left over for things like entertainment, travel, emergencies or home repairs.
When searching for a home, first estimate how much home you can realistically afford. Start with an easy-to-use mortgage loan calculator. These online tools are great for getting a quick look at how much you might expect to spend on a house. By taking the time to estimate what you can afford, you won't waste time looking for properties that are out of your financial reach.
Some homebuyers go one step further by getting pre-qualified for a mortgage before they begin looking at homes. This is a savvy approach, as these buyers narrow their search to homes that fit within their estimate. Getting pre-qualified for a mortgage is a great way to get started as a first-time homebuyer.
3. Moving too quickly
When first-time homebuyers find a house they like, they may rush things a little. For example, they may put in an offer on the first home that has the right features, such as the optimal number of bedrooms and stainless steel kitchen appliances. Unfortunately, there may be other homes that offer all of those features in nicer neighborhoods, or for better prices.
Solving this problem is easy. Just slow things down. Take your time and see what's out there. There may come a time when you're ready to put in an offer, don’t rush. When you take the time to consider features, price and location as you look around, it may be easier to find a suitable property. Plus, you’ll become more familiar with looking at homes and get a better sense of what you really want.
The more you learn about the homebuying process, the more you'll build confidence that helps you to make informed decisions.
4. Skipping home inspections
The last thing you want when buying your first home is buyer's remorse. One of the easiest ways to avoid disappointment is to get a home inspection on the home you’re interested in buying.
It may be tempting to skip this step. After all, arranging an inspection requires time, energy and money. But you may find that the cost of an inspection is the best money you've ever spent.
Inspections sometimes reveal big problems, such as structural damage or electrical wiring issues. Some issues are minor, while others are very expensive to repair. It's also a good idea to be present during the inspection. You’ll learn a lot about the house while listening to the inspector and touring the premises.
Consider asking your realtor to include a home inspection contingency as part of the sales contract.
5. Getting a home that doesn’t fit your lifestyle
Maybe you're happier with a smaller or less expensive space, or you'd like to move on to a bigger home only when your family starts to expand. Whatever the reason, you get to decide if you want to buy a home that costs less than what you qualified for.
Talk to an expert
Now that you know the mistakes many first-time homebuyers tend to make, you'll be ready to avoid them. If you have questions about how much house you can afford, whether you qualify for a mortgage loan or mortgage loan rates, connect with someone who understands homebuying inside and out. Our home lending advisors are ready to help arm you with all the information you need to make informed decisions as a first-time homebuyer.
