Hoping to become a first home owner? Then you need to be realistic and understand that you are a newbie to the property market and the possibility of making expensive mistakes is very high! Your first home is one of the largest financial commitments you will make in your life. The last thing you want is to make the experience far from idyllic by making the wrong choices.
Here are some common mistakes that first time home buyers make.
Underestimating the costs
Due to the lack of experience in the property market, most first home buyers tend to underestimate the cost of buying a home and to overestimate their financial capabilities. In addition to the down payment, a house transaction has many other expenses such as conveyancing costs and stamp duty. Additional costs include property taxes, homeowners insurance, private mortgage insurance, inspections and HOA fees. A mistake most first time buyers make is to disregard these costs and to spend whatever’s leftover from their down payment savings on new furniture and other items.
In reality, it is best to keep purchases to a minimum until the deal is completely closed. Massive last-minute purchases on credit cards can kill your deal while not having enough to cover the conveyance costs and other expenses can cause you many financial problems at the last minute. Until your deal had gone through and you have moved into your new home, keep your costs low, pay your bills on time and steer clear from major purchases.
Not hiring a real estate agent or property investment expert
Why pay a real estate agent when you can search and buy a home yourself? Most first time home buyers think they can outsmart the industry by choosing to purchase a home on their own. In reality, not hiring a real estate agent can end up costing you more. For starters, when you go solo, you are missing out on the expertise and knowledge of an experienced local real estate agent. You will have to conduct your own research, figure out your own financial capability and go through open houses on your own. You also miss out on important information such as crime rates, utility charges and real estate trends in the chosen location.
Make sure you hire a real estate agent to make your first home buying process easier and more streamlined. The commission is definitely worth the amount of hassle, stress and trouble you can avoid.
Not doing a home inspection
So, you come across a home at a great price, the seller seems nice and their real estate agent is begging you to take the deal. You may feel tempted to skip the home inspection (for which you have to pay) and to enjoy the seemingly amazing deal. This is a terrible idea! A home inspection is an absolute must if you are buying a home. Chances are, the house is attractively priced because there is something wrong with it. A home inspection can reveal any problems the property may have and provide you with a chance to save your money and walk away or to come to some sort of arrangement with the seller. Roof problems, basement leaks a poor quality heating system can all be spotted with a home inspection. These are the problems that can end up damaging the structure of a home or end up costing a fortune in repairs. While a house may look great at first glance, a home inspection will look beyond the surface to find any problems that might get you in financial trouble. No matter how attractive the price may be and how nice the owner may seem, an inspection is compulsory to ensure an advantageous transaction.
If you are in the market to purchase your first home, be sure to steer clear of these three major mistakes. Make sure to seek the aid of professionals at every step of the way and to always take some time before you make any commitments.