10 Common Mistakes First-Time Homebuyers Make

The time has come. You are finally ready to buy your first home. This will most likely be the largest purchase that you make in your life.

You’ve saved up money for a down payment. You have a stable income. And you are ready to lay down some roots.

Do you know what you are doing? Do you know where to start?

I’m going to show you the most common mistakes first-time homebuyers make .…so that you don’t make these mistakes.

Most people don’t have a clue. They usually start with Google. Don’t get me wrong, Google is great, but now is not the time to rely on the internet.

Unless you are a seasoned real estate investor, these mistakes are easy to make.

I’m going to go over the 10 common mistakes that first-time homebuyers make. Don’t let this article scare you.

Real estate is a great investment…you just need to know where to start. You also need to know how the process works.

Research

Do your research. One of the most common mistakes first-time homebuyers make is not doing their research.

Research can be a lot of things. Why are you buying a home? Are you looking to build equity for your financial future? Is this a starter home? Do you have children? Are you planning to stay here for a long time?

Each of these questions will help you with your purchase.

Be sure to take your time with your research. You want to find a home that fits your needs.

If you have kids or plan to have them in the future, you will want to pick a home in a good school district. A house largest enough to fit your family.

Do you plan to stay here awhile? You will want to know how well homes sell in the area. This could be an important factor if you are relocated and need to sell.

Get a Mortgage Pre-Approval

I should have put this as the #1 mistake first-time homebuyers make. Not getting a mortgage pre-approval.

Check out my post about everything you need to know about a mortgage pre-approval letter.

So many first-time homebuyers will start looking at homes….only to find out that they do not qualify to buy it. This can be devastating.

Finding out that you can’t afford the house that you love. I have seen it too many times in my real estate career. Never start looking until you have a pre-approval letter in hand.

This letter will state how much you can spend. It will also let you know what the payment would be.

Another tip after you get a mortgage pre-approval letter is to not buy anything. Do not open any new lines of credit. Don’t buy a car. Finance furniture. Nothing!!!

If you do so, you will no longer qualify for the loan.

Another tip is to be sure and work with a great lender. Find the right loan for you. Check out my post about the different types of mortgages.

Over Buying

The next most common mistake first-time homebuyers make is overbuying. Just because a lender has told you that you qualify to spend $500,000, doesn’t mean you should spend that much.

You need to take a look at what your mortgage payment will be. Do you want to spend that much?

Only buy as much house as you need and that you can comfortably afford.

Hire a Realtor

The next most common mistake first-time homebuyers make is not hiring a realtor. Check out my post about why you should hire a realtor.

Now I’m going to say something that will make a lot of people mad….be sure to hire an experienced realtor. Someone that knows what they are doing…or at least works with a good team of realtors.

Now is not the time to work with your friend that just got their real estate license. I was a new realtor at one time, but I worked with a team of experienced realtors until I knew what I was doing.

I have seen it so many times…people work with friends that just got their license or do it part-time. This never ends well.

Hire someone that specializes in working with first-time homebuyers. These agents will be very thorough and explain everything. You want to understand the process. You want them to hold your hand through the whole process.

Location Location Location

Another common mistake first-time homebuyers make is not picking the best location.

The best location can mean many things.

The first rule of real estate is location. Check out this article about why location is important in real estate.

The best location will always yield the best price. But what is the best location?

The best location for you is one that is close to your work. In a good school district. Located close to your everyday needs. Make sure you figure all this out before you start looking for homes.

Future Plans

Another mistake first-time homebuyers make is not accounting for their future.

You want to make sure that you buy a home that fits your needs now…and your future. Does the home fit your needs if you have kids? Do you plan to move soon?

Another thing that people should think about is what they intend to do with this home when they are done with it. You may decide to look at homes that would be a great rental property.

You could live in the home for a few years and then turn it into a rental. This is how people build a real estate portfolio.

Another thing that people should consider is whether they should actually be buying a home…or should you just stay a renter.

What are the pros and cons of renting and buying? Be sure to check out the pros and cons of renting vs. buying.

Home Inspection

Every buyer should get a home inspection. Let me repeat myself….Every buyer should get a home inspection. I talk about this in my first-time homebuyer cheat sheet.

A HUGE mistake first-time homebuyers make is not getting a home inspection. Even if you plan to buy the property as-is.

You need to know what is going on with this house. What is the age and condition of:

• HVAC
• Furnace
• Roof
• Plumbing
• Water heater
• Appliances

Having to fix or replace these items could be a huge financial downfall for first-time homebuyers.

Check out this great video about what happens during a home inspections

On top of the home inspection, I would recommend that you purchase a home warranty. Or you could ask the sellers to provide a home warranty.

This will give you peace of mind that these items will be fixed or replaced if something happens.

Wanting a Perfect Home

The perfect home does not exist. You will create a home after you purchase it.

First-time homebuyers are notorious for wanting everything perfect. You need to be able to see past paint colors or outdated hardware. These items can be replaced over time and for minimal cost.

You need to make sure that the home you buy has a working HVAC and furnace. That your plumbing is free of leaks. That all your appliances are in working order. That your roof will last you a long time.

Stop being so picky about the little things…pay attention to the big ticket items.

Maintenance and Repairs

Many first-time home buyers make the mistake of not accounting for the home’s maintenance and repairs. They only account for the mortgage payment.

The maintenance on a home can add up. Some of the costs of maintenance can include:

• Landscaping
• Pool Cleaning
• Pressure Washing
• Pest Control

I also advocate that you have a savings account for any repairs. This type of fund is also known as a sinking fund. Check out my post about sinking funds, and why I recommend starting one for all future home repairs.

When you own a home, you are responsible for fixing anything that breaks. You need to be prepared for any issues that arise.

This is another good reason to have a home warranty.

Another mistake that first-time homebuyers make is not accounting for an increase in taxes and insurance. Most people forget about these because it is included in your monthly mortgage payment.

The minute there is an increase in these items, the bank will let you know. You will need to be ready for these items to increase. They always do.

Don’t Get Emotional

Buying a home can be emotional. You need to try your best to remove the emotions. You aren’t going to find the perfect home. There are going to be bumps in the road.

This is why you hire professionals for everything. They are there to help you with the process.

There can be problems with contract negotiations, financing, home inspections and more. You need to manage your expectations. Take your time.

Buying a home is not as easy as it looks on HGTV.

If you are serious about buying a home, make sure to hire professionals. They can help you avoid these common mistakes first-time homebuyers make.