There is no such thing as the perfect home or the perfect home buying experience. No matter how many homes you buy during your lifetime, there will always be some type of nagging mistake or oversight. But when you're buying a home for the first time, the chance for error is greater.
Below are a few of the more common mistakes that first-time homebuyers might make. Hopefully by knowing them, you'll be in a better position to avoid them.
1. Not budgeting for added costs
Too many first-time homebuyers overextend themselves financially because they use all of the money they've allotted to cover the down payment and monthly mortgage costs. In reality, there are many other expenses to consider, including closing costs, moving expenses and property taxes, just to name a few. And, these are only the expected ones! What if the roof requires repair or the furnace or hot water heater need to be replaced?
Make sure you save enough money to cover both expected and unexpected expenses.
2. Neglecting to find out how much you can borrow
Without knowing how much money you can borrow, you really don't know what you can afford, so you might be wasting your time looking at homes you can't buy. In housing markets where inventory is tight and you're bidding against another prospective buyer, it's even more important to be pre-approved so the seller takes you seriously and you're in a position to do business immediately without delays.
3. Failing to stick to a budget
Homebuying is an emotional experience and too often prospective buyers get carried away by a home that is beyond their means. It's better to look at homes that are less expensive than the amount you've been pre-approved for because that gives you some wiggle room to move up, rather than starting at the ceiling of the amount you can borrow.
4. Buying a home for today, not tomorrow
It's easy to focus on your current needs. But, what if you decide to have a family? Or start working at home and need a home office? Or, you need a bigger yard for the dog your kids will want?
5. Not paying enough attention to the little things
Sometimes homebuyers may feel rushed and fear that someone else will buy the home. Or, they are so in love with the house that they fail to notice smells or stains that can be telltale signs of structural problems or necessary repairs.
6. Overlooking neighborhood issues
With so much technology at our fingertips these days, there is no excuse for a lack of knowledge. But, prospective buyers don't always pay attention to their surroundings. Here are some questions to consider. How well is the local school system rated? Even if you don't have children or plan to, the school's rating can dramatically impact the value of your home. How safe is the neighborhood? How far is the closest hospital?
How bad is traffic during rush hour? How much noise is there in the evening?
7. Hiring the wrong real estate agent
The right Realtor can make the difference between having a fabulous experience or a disastrous memory. Do your homework on your agent before committing to work together. You will be spending a lot of time together and sharing many personal details, so make sure you choose someone that you feel is competent, motivated and knowledgeable and also, someone you can trust.
If you don't know where to start when looking for a realtor, ask friends, family or co-workers for recommendations.
8. Passing up the chance to negotiate
Especially in tight housing markets, buyers are often afraid to negotiate. However, the bottom line is that just about anything can be negotiated if handled properly - from the move in date to the closing costs to covering major repairs. It never hurts to ask.
9. Failing to get a home inspection
Some buyers don't realize they have a right to have the home inspected or they falsely assume that everything is okay because it's a newer home in a nice neighborhood. Once your offer is accepted, you should always have a home inspection. But, don't forget that not all home inspections are the same. Be sure to review what you're getting and that your inspector had access to all parts of the home.
10. Neglecting to purchase sufficient homeowners' insurance
Homeowners insurance is required on any home that is financed, as it protects the lender's investment should something happen to the home. However, there are many different types of policies and unfortunately too many people opt to purchase the cheapest one which may not include as many protections or may carry a higher deductible. Make sure you understand what you're buying and what is covered. Shop around and compare rates. If you're in a flood-prone area, you may need to buy separate flood insurance as flood damage is not typically covered by most homeowner's insurance policies.
There are certainly other mistakes to avoid when buying a home, but hopefully by avoiding these common ones, you'll have a more satisfying buyer experience with fewer regrets.
5 Questions to Ask Before Buying a Home
Understand All Your Financing Options as a First-Time Homebuyer
Meet our mortgage lenders.
The information and recommendations contained herein is compiled from sources deemed reliable but is not represented to be accurate or complete. In providing this information, neither Cortland Bank or its affiliates are acting as your agent or is offering you any tax, accounting or legal advice.