Buying your first home is one of the most exciting experiences of your life, but you can't go into the process without understanding the possible pitfalls.
Although you're shopping for an initial property, you don't have to walk away with a house that doesn't meet your expectations. To accomplish your goals, you need to tackle the home buying experience strategically rather than rushing through it to become a homeowner faster. Doing your due diligence is the key to make certain you don't have buyer's remorse down the road.
To help ensure you select a home you'll love for years to come, avoid these five first-time home buyer mistakes:
- Thinking you can go it alone: The Internet provides many tools for home buyers who want to get more information about how they can find the right property for an affordable price. However, these tools can only go so far. Throughout the home buying process, you'll have to work with a number of different professionals, including a real estate agent and loan officer. Use their expertise to get the appropriate amount of financing and lowest possible sale price, respectively.
- Forgetting the home inspection: When you buy a used car, it's a good idea to have a mechanic check it to make sure the vehicle is functional. The same goes for buying a home. The housing market has some lemons of its own, so you'll want a keen eye to determine if the property you're considering has any structural other other issues that you should be aware of before closing the transaction. A professional from a home inspection company will visit the property and examine the foundation, roof, attic, gutters, structure and a host of other factors. Based on his or her report, you can decide whether any necessary repairs are worth the cost.
- Forgetting the preapproval: If you're not buying in cash, you'll need some way to show sellers that you have the funds to support your offer. Before you start viewing homes on the market, visit a lender to get preapproved for a mortgage. The process will be similar to actually applying for a home loan in that the lender will assess your credit, employment and income information, among other factors. After your information is evaluated, you'll receive a preapproval letter that notes the amount of financing you can receive. This letter serves as proof that you have the funds to complete the sale, which is particularly beneficial in a competitive market.
- Maxing out your budget: The home buying process has many costs, and there are several new expenses you take on as a homeowner. Plus, you may need extra funds to complete any repairs revealed by the property inspection. When shopping for a home, consider properties that are valued at a price that is below your budget. Doing so will leave some money for the aforementioned costs and give you wiggle room if there are competing buyers and you're in a bidding war. To determine how much space you should leave in your home buying budget, take some time to create a list of the expenses you'll have during the process and a few months after you're a homeowner.
- Letting your emotions run the show: Buying a home is an investment. Keep resale value and affordability in mind at all times. It can be easy to fall in love with the first home you see and make the previous mistakes in an attempt to secure what you believe is your dream home. Be pragmatic and save the emotion for when you finally have the keys to the right house.