If you are ready to make your first foray into the real estate market to buy your own home, you might be a bit concerned about all that’s involved with the process. It is a lengthy process at that because you have to save money for a down payment, get your credit reports in-order, have money set aside for the good faith deposit, inspections, and, for closing and hefty moving costs. All of these expenses come before you even put the key in the front door and because it’s such an unfamiliar process, it’s no wonder why the biggest first time home buyer mistakes are made routinely.
Biggest First Time Home Buyer Mistakes
Right now is one of the best times to purchase a home because of current market dynamics. There are a number of home loan options, near historic low interest rates, prices remain affordable, and, there’s no shortage of newly built, new construction, and resale properties available. The time to act is now because home values are steadily rising and though mortgage interest rates are incredibly low, the decision by the Federal Reserve to incrementally increase interest rates will inevitably drive home loan rates up.
“Given the complexities associated with the costs of buying a house, jumping into the market and effectively competing with aggressive bids can be daunting. If done wrong, a home purchase can result in enough financial regrets to last a lifetime for first-time homebuyers.” —CNBC.com
Nearly regardless of the timing, there are inevitably mistakes first time home buyers make. It’s often due to being unacquainted with the process; as the saying goes, “You don’t know what you don’t know,” and unfortunately, this lack of insight can cost you big time. This is why you should choose a trustworthy lender and have a dedicated real estate buyer’s agent on your side. Here are the biggest first time home buyer mistakes made so you know which to outright avoid:
- Not factoring-in all monthly costs. Sure, you probably will know what your monthly mortgage payment will be, but, it doesn’t include utilities, groceries, repairs, routine maintenance, and many other expenses. Be aware that what you’re paying per month in living expenses could change and in the Orlando market, you’ll probably save every month on housing when you own versus paying rent.
- Getting emotionally attached to one home. There’s no question that buying a home is a big decision and it’s just not possible to totally shut out your emotions. However, you need to try to stay objective and deal with uncontrollable circumstances which are common in the world of residential real estate. Remember, it’s important not to become attached to a specific property because there are so many great choices available.
- Making big time, regrettable compromises. What you might compromise today can be a very big burden as the years unfold. While it’s critical to understand and accept the fact you likely won’t be able to check off all of your wish list items, but, be thoughtful about which must-haves you compromise. There are things you should be willing to compromise but don’t make concessions which can come back to haunt you in years to come.
- Buying a home and not into a neighborhood. One thing that any experienced real estate professional will tell new buyers is that it’s far better to buy into a neighborhood or community rather than just a house. You want to buy in a stable neighborhood because it will have a huge impact on the property’s resale value and you can’t control the neighborhood.
- Not taking your future possibilities into account. Along the same lines of buying into a stable neighborhood is to also think sincerely about your future plans. While some accommodations can probably be made, you should consider if the home can grow with you over time.
When you are ready to enter the housing market and want to purchase your first home, enlist the help of an experienced real estate professional to guide and advise you through this exciting but challenging process.