Buying a home is often a very exciting time, as it represents a significant life achievement and financial success. However, new homebuyers can overlook some important considerations in all of the excitement, leading them to make potentially costly mistakes. The best way to avoid these mistakes is to be aware of them right from the beginning. If you are looking to buy a home, here are some common homebuyer mistakes to avoid:
1) GETTING A HOME AT THE TOP OF YOUR BUDGETWhen buying a home — especially your first home — it may be tempting to go all out and get your dream house. You will start rationalizing more expensive properties to yourself because you fall in love with them, even if they are over your budget. Breaking your budget is a bad idea, and the best way to keep yourself from doing so is to get preapproved for a mortgage first. Even then you should strive to come in at least 15-20 percent under your preapproved amount. Just because you can afford something right now doesn’t mean that your financial situation might not change in the future. It is always better to play it safe.
2) FORGETTING ABOUT ADDITIONAL HOMEOWNERSHIP COSTSOne of the main reasons why you should always stay within your budget is that homeownership comes with many hidden costs which can really add up. You need to be aware of the property taxes, utility costs, insurance and maintenance costs that are going to come with your new home. If you don’t take these costs into account when coming up with your budget, you will have a difficult time making all of your monthly payments on the house.
3) FORGOING A PROFESSIONAL INSPECTIONThe importance of getting a professional inspection before finalizing a sale on a home cannot be overstated, as it can save you from unexpected costs in the future. A house may look like it is in great shape and worth every penny, but a professional inspector can tell you if you will be looking at needing to make major and costly repairs after your purchase. This information can help you back out of a bad deal in time, or, if you’re willing to make the repairs, negotiate the price of the home.
4) NOT CONSIDERING THE RESALE VALUE OF YOUR HOMEWhen in the processes of buying a new home, one of the last things you are probably going to consider is the home’s potential resale value. If you love the home and you plan to stay there forever, then why give any thought to selling it one day? Any number of life changes could mean needing to move again in the future. The time may come when you will want or need to sell the house, so ensuring that it has good resale value before you buy may help you out immensely in the future.
5) RELYING ON VERBAL AGREEMENTSWhen buying a new home, you should never rely solely on verbal agreements. It is in your best interest to get everything in writing before agreeing to the sale. Failing to get a seller to agree to your offer in writing can also open the door for another buyer to come in with a lower offer at the last minute and steal the property out from under you! Getting everything in writing is a must. Review the contract carefully with your real estate agent. Homebuyers are sometimes shocked to walk into their new home only to find that there are no kitchen appliances or light fixtures, for example.
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