Anyone who has experience in real estate will tell you that first time homebuyers are the ones who make the most mistakes when purchasing a new home. Not everyone makes the same mistake, and they never make the same mistake twice. However, there are common mistakes that new homeowners make. This article will focus on ten of the most common mistakes and provide ways you can avoid making them.
Waiting too long to buy
If you are renting, you are paying away money every month to someone else that you could be paying to yourself. Take a good look at your income and decide whether or not you can afford to purchase a home. If you can afford to pay rent, then you can afford to buy. It costs nothing to check with a bank to find out if you would qualify for a mortgage and the amount for which you are pre-qualified will give you a price range in which you can look at houses.
With the collapse of the real estate industry in 2008, house prices fell sharply. Many new homebuyers are still holding off buying their first home in hope that the prices will continue to drop. However, the fact is that when a home goes on the market at a significantly reduced price, chances are it is snapped up in hours or a few days. When you see a house that you would love to buy, the key to getting this house is to act quickly.
Acting too quickly
Even though you sometimes need to act fast to get the home of your dreams at a price you can afford, you do have to take several factors into consideration. The homeowners likely have staged the home for a quick sale and in so doing have hidden many of the problems that come with the house. Look for signs of mold and scrutinize the cosmetics of the home before you rush into a sale.
Not requesting a home inspection as a condition of the sale
It is of utmost importance that everyone, not just first time homebuyers, request a home inspection of the home they want to purchase. A good inspection can be a condition of the sale in which you can back out if the owner does not agree to correct any faults that are found or reduce the price of the home accordingly. Home inspectors are trained to look for problems that you would not see during a walk-through. They inspect the roof, the attic and the basement as well as the plumbing and wiring of the home. They also check the structure to make sure that you won’t incur large maintenance expenses just shortly after you move in.
Checking out the neighborhood
Ask the owners why they are selling the home. They will probably not tell you that the reason is because of noisy neighbors or that the neighborhood has gone down hill. This is something you need to check out for yourself to make sure that you will be happy living here.
Can you afford the utility expenses?
Ask to see copies of the utility bills for the home to make sure that the costs of heating and electricity are not so high that you won’t be able to afford to pay them during the cold winter months.
Buy when the interest rates are right for you
Check out the interest rates with the lender. Interest adds to your monthly payment and adds to the term of the mortgage. The lower the interest rate you can get at the beginning of the mortgage is best, but you also have to allow for rising interest rates whether you lock in for a period of time or choose a variable rate mortgage. You need to have the money available to make higher monthly payments or you could be facing foreclosure of your home if you are in default.