Buying a home can be an intimidating process full of emotional twists and turns. There’s so much to do and so much to know and that goes double for anyone who’s embarking on homeownership for the very first time.
You don’t want to scare yourself away from the entire process, but you do need to be aware of a few common traps that some first-time home buyers fall into.
If you’re aware of these five potential mistakes, and able to keep yourself from making them, then you’ll be saving yourself some significant stress on your home buying journey.
- Not finding a qualified real estate agent
- Not understanding your down payment options
- Not getting prequalified for a loan
- Not researching the neighborhood
- Not understanding what’s fixable and what’s a deal-breaker
1. Not finding a qualified real estate agent
It’s so easy to find homes for sale online these days that you may wonder why a real estate agent is even necessary.
But real estate agents do far more than simply sending you listings to look at. We know that you are probably already doing that before you even contact us!
The reason that this is the #1 mistake to avoid is because a qualified real estate agent will help you avoid the rest of the mistakes listed below… and more!
A qualified real estate agent will help you through every long and tedious step from start to finish, help you negotiate the best deal, give you insight on market conditions, provide recommendations for vendors (lenders, insurance agents, contractors, title companies, etc), and a list of additional services that will keep you focused on the end prize.
Having a qualified real estate agent can make or break the home buying experience. And there is not really a good reason to not use a real estate agent. It is simply a no brainer!
2. Not understanding your down payment options
The biggest barrier for many first-time buyers is the down payment. But that’s partly because most people assume that buying a home requires 20% down. That’s not true!
You can put down as little as 3.5% with an FHA loan, 3% with a conventional loan, and 0% with a VA loan!
Some government organizations and lenders also incentivize first-time homeownership by offering free down payment grants to qualified buyers. Depending on purchase location, income level, credit score and other factors, you could qualify for free money towards your down payment.
To learn more about down payment assistance, click here.
3. Not getting prequalified for a loan
On the subject of mortgage loans, before you trust those “estimated monthly payment” numbers that you see popping up next to your potential new dream home on a website, you need to find out what a lender will be willing to lend to you. That means getting prequalified for a mortgage loan.
Getting prequalified includes applying with a mortgage loan officer and submitting documents like your monthly pay stub, tax returns, and bank statements in order for that lender to tell you what loan products you qualify for and how much they will lend to you.
It takes some work, but that prequalification letter is the key to being able to make an offer when the right house hits the market!
To view a list of our preferred lenders, click here.
4. Not researching the neighborhood
Location, location, location. It’s important when buying for the first time to make sure you’ve done your research on the neighborhoods in your price range.
Here are just a few questions to ask:
- Is an 8 a.m. arrival time at work still reasonable with this neighborhood’s commute?
- Where are the closest grocery stores, parks, gyms and other amenities that you frequently use?
- What are the overnight noise levels? Are there train tracks nearby? What about highways or flight paths?
- What school district is the neighborhood zoned to? Even if you don’t have kids in school currently, would you want them to attend these schools if you did (or when you do)?
I always recommend that buyers drive the neighborhoods of the homes that they are viewing online at various times of day and night to see what it might be like to live in that area. You’ll save a lot of time by being able to narrow your search to the perfect location for you.
5. Not understanding what’s fixable and what’s a deal-breaker
Those paint colors on the wall are hideous, and you can’t imagine how anyone could fit into that minuscule bathroom. Are those annoyances that can be fixed or deal-breakers that mean you should pass on the property entirely?
Real estate agents see so many houses in various stages of repair and updating that they can show you what colors are trending and how you might be able to maximize your space for better functionality. The reality is that any repair can be made to any house for the right price. But does that mean it should be made? And more importantly, does it work within your budget?
Furthermore, how do the repairs needed in one house compare to similarly priced houses? You might be willing to do the work, but what if you could buy something similar without having to do it?
Learning what’s fixable and what’s a deal breaker is a valuable skill and will help you avoid a purchasing mistake!
In Closing
Making these common first time home buyer mistakes could be the difference between buying your first home and continuing to rent. However, if you’re able to avoid them, you could be signing the closing papers on your first home before you know it!
If you have been thinking about purchasing your first home, it is never too early to start the process. At Edgewater Realty, we are qualified real estate agents who are ready to help you learn about down payment assistance, preapproval, and finding the right home in the right location that fits your needs!
Contact Edgewater Realty today to get started!
