5 Mistakes First-Time Home Buyers Make
So you’ve decided to take the plunge and become a homeowner. Congratulations! Once you decide to buy, most people never look back.
“But I heard it’s such a complicated process…”
It can be…especially when you’ve never done it before. Remember the first time you tried to drive a car? But now you just get in and turn the key.
And home buying gets even simpler when you skip these five very common, very easy-to-make mistakes.
Mistake #1: Not getting prequalified
“So everybody tells me I need to buy. I’m totally over the rental scene – landlords, applications, moving when they sell out from under me. So my first step is to go to open houses, right?”
“Not unless you’ve got a lot of time to waste. Your first step is to get prequalified for a mortgage, unless your family left you a trust fund and you’re a cash buyer.
“So why not just wait till I find the property I love and go get a mortgage?”
“So you fall in love with this $400K condo. You’ve got $25K as a down payment. This is not going to work. Or you’ve got the down payment and you’re earning a healthy executive salary, but something dings on your credit – maybe a mistake from two years ago.
“Now that nasty redhead who pushed you aside at the open house got her prequal. She puts in her bid while you’re still figuring out your credit score. You deserved that apartment, but she got it.”
Mistake #2: Shopping for the maximum value you qualify for.
“Yaay – celebration time! I just qualified for $400K. I’m looking at places $425-450. They don’t expect to sell for that, do they?”
“Sure you can do this…but smart buyers pick a number below the max. Hang on to your cash for emergencies and diversify your portfolio, with the help of a good financial advisor. You’ll also need to budget for unexpected repairs and paint those pink walls a lordly shade of blue.
“Don’t let anyone talk you into shopping ‘just to see what’s out there.’ Don’t look at anything outside your price range. You’ll start to feel like Orphan Annie looking through the windows at Christmas dinner.”
Mistake #3: Ignoring what’s important to your quality of life.
“OMG, I just love this place. The bathroom fixtures are fabulous, the kitchen’s got an island and I can just see my cat sleeping on the windowsill.”
“Um… didn’t you say you would never live in a place with just one window? Or a ground floor?”
“Yeah, but just look at this kitchen!”
“You’ll be here for a long time. When you give up what’s important, your home will start to feel like that summer camp where you got stuck for six miserable weeks in bunk beds. Where’s that list again?”
Mistake #4: Insisting on perfect and ignoring “close to perfect.”
“That wall…such a sickly shade of green. I couldn’t live with it.”“That’s easy. A couple coats of paint and you’ve got a great home…probably cheaper because a lot of buyers will do exactly what you say. They won’t look past something fixable.
“Just investigate what you’ll pay to get what you want. Moving walls takes a lot more money than painting them.
Mistake #5: Focusing on the home and not the neighborhood.
“Nicest house on the block! The owners did such a great job fixing it up – a it’s a bargain!”
“Red flag going up! Look at the ‘hood before you look at the house. You can’t change location – and that influences your home’s value more than any other factor.
“Savvy buyers aim for the smallest house on the most desirable block…the tiniest unit in an upscale condo building. When they’re ready to move up, they’ll get a good price even in a soft market.”
“OMG, I feel so dumb…”
“Nope. Even people who’ve bought and sold a dozen times will freeze when they hit the market again. We just worked with a client who’s owned half a dozen properties and knows almost as much about real estate as we do … and I had to talk her out of making an offer five minutes after she saw her dream house.
“Buying a home is emotional as well as financial. It’s easier to get in than out. But choose your agent wisely, go slow but be ready to move fast, and you’ll soon be wondering what took you so long.”