7 Rookie Home Buying Mistakes

One of our favorite reasons to work with first-time home owners is to help prevent our rookie clients from making the same mistakes we’ve seen some of our friends and family make. It’s easy to get caught up in the notion of owning a home and overlook important details, ending up with a poor financial investment that’s more of a burden than benefit. In most cases, home buyers simply didn’t know any better. Consider this your chance to learn from the rookie home buying mistakes of others and make smart choices:

1. Buying A Home That’s Too Expensive. Just because you can afford something, doesn’t mean you should. The current generation of first-time home buyers has been preconditioned to buy now and pay later, and we’ve seen the devastating results in skyrocketing debt. Just because a mortgage lender has approved you for a specific amount, it doesn’t mean you should max that out. Home owners buying homes they couldn’t actually afford (because their banks approved them) was a huge contributing factor to the housing collapse of 2007 and was a lesson learned by hundreds of thousands of home owners. Not only do you need to be able to afford your home now, you need to be able to afford it in the future. Consider rising interest rates, unforeseen emergencies and significant life changes when determining what you can afford.
   
   
2. Misunderstanding The Market. A lot of people get to a specific stage in their life, when their job seems stable and their finances are on track, and start to get the bug to buy. However, the market works in cycles and just because you’re ready to buy, doesn’t mean you should. Buyer’s markets occur every few months on a small scale, but they also occur on a much larger scale over the course of several years. It’s really important to research the market history of any area you’re looking at to see whether it really is in your best interest to invest. Waiting a few years might seem painful for those anxious to own homes, but it can make the difference in home values by tens or even hundreds of thousands of dollars.
   
   
3. Ignoring Resale Potential. Talk to your friends and family and you’ll probably find a few people who are stuck in their current homes because even after years of investment and market inflation, they aren’t actually able to upgrade their homes. That’s because the selling costs negates any profit they would make on their home, essentially making it impossible to move upward, without taking a loss. Analyzing the resale potential of your home will help ensure home flexibility in the future.
   
   
4. Taking The Seller's Word For It. Starry-eyed buyers want to believe everything the seller says but any spoken agreements basically don’t exist. Ensure that all agreements are written in the contract, including an accepted offer. Sometimes sellers will verbally accept an offer, and they really do mean to follow through, but then they receive a higher offer prior to signing the paperwork. All the hurt feelings in the world won’t undo a broken promise and verbal agreements don’t hold up in court. Get everything in writing.
   
   
5. Skipping The House Inspection. Always, always, always hire a home inspector. If you can’t afford this step or think it’s an unnecessary expense, then you aren’t ready to buy a home.
   
   
6. Forgetting Extra Costs & Fees. There’s more to buying a house than mortgage payments. And you may have already factored in property taxes and annual HOA fees, but did you consider appraisals, credit reports, escrow, notary and insurance as well? If you’re borrowing money for your down payment, don’t forget about paying that back too. The initial purchase of a home will cost you a pretty penny and it’s important to be prepared for this.
   
   
7. Getting Emotionally Attached To A House. At the end of the day, buying a home is a financial investment. First-time home owners often fall in love when they find a house that fits their criteria. However, this emotional attachment to a home can cloud your judgment. In addition to causing disappointment if the offer isn’t accepted, it also blurs your ability to make rational negotiations and ensure that the home is actually a good deal.

A good real estate agent will help you avoid these common pitfalls, and we always recommend choosing an experienced REALTOR® for your home purchase. New home buyers will especially benefit from the expertise and guidance of a real estate professional, and we always love assisting people with finding their first home.

Have any questions about buying your first home? Comment below and we’ll be happy to answer!