Thinking about buying your first home? Congratulations on achieving this milestone in your life! But before you get too swept up in daydreams about what color accent rugs you’re going to buy to match the cutest curtains you saw online, it’s important to ensure that you’re truly ready to take the plunge into home ownership. The numerous steps involved in the home buying process can easily overwhelm newbies to the real estate market, leading them to make costly mistakes. In this article, we’ll walk you through some of the common mistakes that first time homeowners make as they shop for their dream home.
Looking For a House Before Doing Financial Research
Let’s face it: there’s a lot about house shopping that’s exciting. With the Internet just a few clicks away, it’s tempting (and easier than ever) to go online and immediately start your house search. While filling up your online bookmarks with neighborhoods and potential homes is fun, it’s not a practical first step. Instead, focus on doing research on your financial situation. What’s your credit score? How much can you realistically put on the table for a down payment? What types of lending opportunities are available? Answering these questions should be your priority. Otherwise, you may end up with a lot of time wasted looking at houses that are completely out of your financial range.
Not Talking to Enough Lenders
In many ways, shopping for a house is a lot like shopping for a car: you don’t want to say yes to the first lender option you’re offered. A smart car buyer will shop around at different lots and with different lenders to ensure they’re getting the best bang for their buck. The same goes for buying a house. During the mortgage process, make sure you talk with multiple lenders to find the best fit. While this can be time consuming, it’s worth it to potentially save thousands of dollars at the end of the day.
Skipping House Inspections
Once you’ve found a house you want, try to schedule as many walkthroughs as possible. You want to triple check that there isn’t any rock unturned; otherwise, you may be signing for a house that has more problems than advertised. Potential homeowners also have the option of hiring a third-party inspector, who will act as a neutral party to inspect your house. This is only optional, of course, and some homeowners don’t elect to take this route since it’s an additional cost, especially if you’re buying new. Whether you hire one or not, make sure you walk the grounds and inspect the inside of your house as thoroughly as possible so there aren’t any surprises after move-in day.
Forgetting the Ongoing Costs of Home Ownership
Homeownership may start with a mortgage, but the costs certainly don’t end there. When determining their house payment budget, many first time homeowners forget about all the additional costs. Between the Homeowners Association (HOA) fee and the utility costs (spoiler alert: cooling or heating a house is far more expensive than an apartment!), and general upkeep, monthly fees can rack up. Make sure you factor in those costs when you’re planning your budget.
Spending Too Much Money on a Down Payment
Related to the above, first time homeowners can end up in hot water if they place too high of a down payment on their house and drain their savings. While placing a nice down payment is generally recommended, don’t spend so much that you don’t have any savings left over. Even newer houses can require repairs, and unlike apartments, your plumbing or kitchen appliance maintenance won’t be covered under a lease. Work with a real estate agent to determine what a sensible down payment is for you.
Making the Decision All Alone
The road to home ownership can be a bit like the trek to Mordor – it’s not recommended you go alone. Be sure to take the time to ask family and friends for their opinion. Of course the ultimate decision is yours, but it’s always helpful to get an unbiased third perspective, especially when it’s your first go-round.
Being Too Picky
Don’t get us wrong; it’s important to know what you truly need and want out of a house. If a big backyard is important to you because you have three dogs, or if you want multiple bedrooms because you have a large family, you don’t need to compromise on these major requests. However, there’s a great chance that you and/or your partner will not 100% love every aspect of your house – and that’s expected. If you find a great house in a wonderful neighborhood that meets 9/10 of your house dreams, consider buying it; if you let it go because you’re looking for greener pastures, chances are you won’t find it – and that great house will be sold to someone else!
Buying a house is an exciting, stressful whirlwind of decision-making, crunching numbers, and a long list of steps to check off. However, one can’t deny that there is a unique, satisfying joy in being handed the keys to the very first house that’s truly your own. So with this new knowledge, go out there and find your new home!
Sarah graduated from Trinity University in 2012 with a degree in International Relations and Political Science. She writes blogs on new homes, decor, communities, and more for NewHomeSource. When she’s not writing, you can find her spending time with her three cats.