First Time HomeBuyer Rookie Mistakes
A mortgage is likely the most significant purchase someone may make. It is an investment with a long legal and financial process. Here are 6 rookie mistakes that first time home buyers should avoid.
1. Falling in Love
Always avoid falling in love with a house. Many things can go wrong from when you first see a house to moving in.
In some cases, the furniture and cosmetic features of the house are staged. They are designed for the buyer to visualize the property as their own to help make the sale. A survey from the National Association of Realtors reported that 39 percent of sellers’ agents said that staging helps decrease the time a house is on the market. 21 percent said that staging increases a home’s dollar value by 6 to 10 percent.
When you are set on a home, your judgment is likely clouded when you receive bad news, such as if the home inspection report reveals structural issues. Additionally, some first time home buyers fall in love with a home before knowing what they can genuinely afford. Because of this emotional attachment, they stretch their budget too thin or get caught up in a bidding war with other homebuyers.
You should purchase a home with a level-head and a realistic expectation.
2. Being House Poor
House poor is when a person spends a large amount of his or her finances on homeownership. Some first-time home buyers want a lower interest rate or avoid private mortgage insurance and put all their funds into their sizeable down payment. However, when they finally move in, they don’t have enough cash to decorate, make repairs, or may even have trouble meeting other financial obligations.
Always budget well and buy a home below what you can really afford. You can still make repairs and upgrade your home to what you want later.
3. Hiring a Bad Home Inspector
A home inspector is supposed to be an objective third party that provides the homebuyer with an accurate report about the condition of the home. Hiring an inspector that is not honest or thorough may cost you a lot of money down the road.
You may also consider not hiring an inspector that is recommended by a real estate agent to avoid any potential conflicts of interest or bias.
4. Not Checking the Internet and Cell Phone Service
Always research the home before you sign the purchase agreement. If your home is located in an internet or cell service dead zone, you’ll regret your purchase.
Contact your preferred Internet service provider and verify that they provide service to that address. You may also want to run an Internet speed test on the seller’s network, with permission, to confirm the quality of service.
Of course, check your phone when you are touring the property to make sure that you can send and receive calls and messages within the house.
5. Not Shopping Around for Lenders
Lenders have different approval criteria as well as terms and conditions. Always shop around and get various Loan Estimate forms to compare closing costs, interest rates, and terms and conditions.
Remember, your lender will have your business for years, so choose the right partner. Don’t just go with the bank you are already with without doing some research first.
6. Not Cleaning the Carpet Before Moving In
It is much easier to get a carpet professionally cleaned before you move in and set down furniture. By planning well, you can avoid the extra expense and hassle of cleaning around the furniture that you can’t easily move.