Mistakes First Time Buyers Make:The home buying process is a complicated and demanding process that takes patience, timing and a little bit of luck.
Mistakes First Time Buyers Make:Before you sign the paperwork, be sure you haven’t made one of the top 10 mistakes a first time buyer buying could make.
- Ignoring the Property Inspection: The property inspection is one of the most critical times in the home buying process. The results of the inspection can put your mind at ease, give you negotiating leverage, or alert you to problems that you should walk away from. Ignoring or skipping the property inspection could prevent you from discovering problems with your new home that could cost you dearly in the long run. Prospective homebuyers should hire an independent inspector and scrutinize the results in order to protect themselves down the road.
- Paying Too Much for the Broker’s Commission: The broker is an important player in the home buying game, but many people fail to realize that the commission that is paid to them can actually be negotiated. Before you pay too much, try negotiating a lower rate with your broker. In these tough economic times, most brokers will work with you, and in the long run a simple negotiation could save you a great deal of time and money.
- Poor Budgeting: Budgeting may be the most important part of the home buying process. Until you know how much you can afford to pay each month, you shouldn’t even think about buying a home. Your budget should be long term and include as many incidental costs as you can think of. Don’t forget to include property taxes and closing costs, both of which will require a solid understanding of how much money you can spend on a home. The keys to proper budgeting are planning, a realistic idea for the future, and attention to detail.
- Bad Location: No matter how beautiful the home you’ve found may be, if it’s in a bad neighborhood, it might be best to find another home. A bad location can have long lasting and devastating consequences. A terrible commute can cut into the time you enjoy your home, crime or an unsafe neighborhood can make you feel like a prisoner in your home, and declining property values can make you flat out miserable. As the old saying goes, there are three things you should look for when buying a new home: location, location, location.
- Assuming Repossessed Properties are Great Deals: We’ve all seen the ads advertising home prices for pennies on the Pound. But are these advertisements too good to be true? The short answer is yes. Repossessed Properties often seem like a good deal, but the fact is that most were owned by irresponsible owners that did not properly maintain the home. The result is that they usually require maintenance and often come with major problems or hidden issues that can make them a real money pit. While some truly are a bargain, a traditional home purchase may be more reliable.
- Falling In Love With a Home: Don’t let the home of your dreams cloud your judgment. While the home may be just like the one you dreamt about as a kid, that is no justification for spending too much or sacrificing amenities you were looking for. Don’t fall in love with a home; instead, search objectively and find a home that is the right mix of emotional satisfaction and common sense.
- Too Small of a Deposit: The more money you put down on a home purchase the less money you will spend in the long run. Sounds simple right? While the concept is simple, for the prospective homebuyer the stakes of heeding that advice are much higher. Homes are expensive, and failing to put enough money down could cost you tens of thousands of dollars in interest charges. Understanding how much you can afford and putting yourself in the best financial situation possible is extremely important when buying a home.
- Not Knowing Your Credit History: Before you head to the bank to take out a mortgage loan, you should know your credit report inside and out. Why? Because the existence of negative items on your report could prevent your form getting a loan altogether or at least alert you to potential hang-ups in the loan application process. Obtaining your credit report is a small step that can save you plenty of time and stress in the process of getting a mortgage.
- Not Protecting Yourself Contractually: Sometimes things just don’t go according to plan. The seller could back out, or your financing could fall through. If you haven’t planned for these contingencies then you could be left with a huge problem. If you have the resources, consult an attorney regarding your real estate transaction. It may seem expensive, but a few hundred dollars in lawyer’s fees could save you from getting stuck in a bad situation when things go wrong.
- Not Doing Enough Research: Research is essential in buying a home. Knowing the neighborhood, the price of the home, the reliability of your broker or agent, and the details of your mortgage are only some of the things you must research carefully if you want to avoid getting ripped off. Do yourself a favor; treat the transaction like a thesis paper and devote a substantial amount of time and energy to understanding it in great detail.
Posted by My First Home