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June
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The Most Common Mistakes For First-Time Home Buyers
Diving into the real estate market for the first time can be fraught with uncertainty. From deciding where to live to negotiating a contract, there are many big decisions to make, and it can be easy to make mistakes along the way.
According to our real estate agents, the best way to prevent mistakes is to do your research and work with a qualified expert. Here are some of the most common mistakes we see first-time home buyers make:
- Choosing The Wrong Real Estate Agent
When navigating the real estate market for the first time, you need an experienced professional in your corner to help you negotiate terms and avoid pitfalls. Choosing an inexperienced agent can result in costly mistakes. Make sure to do your research and choose a reputable agent and broker before beginning your home search. - Waiving The Home Inspection Contingency
In a hot seller's market, it can be tempting to waive the home inspection to differentiate your offer from the competition; however, this strategy poses major risks. Home inspections are likely to uncover major (and expensive) issues that may not be easily observed during an initial walkthrough. By waiving the inspection contingency, you lose the right to back out of the deal if an expensive problem pops up. (at least without losing your earnest deposit). - Spending More Than You Can Afford
There are dozens of expenses involved in financing a home purchase. Closing costs, a down payment, principal, interest, taxes, insurance, and more. As a result, determining what you can afford can be challenging. Before you start shopping, ask your lender or mortgage broker for a cost sheet to break down all the various expenses. You don't want to end up closing on a home that you can't afford. - Making A Small Down Payment
First-time homebuyers can qualify for a mortgage with as little as 3.5% down; however, the less you put down, the higher your mortgage payment and the longer it'll take to build home equity. When putting down less than 20%, your lender will also require you pay private mortgage insurance (PMI), which covers your lender if you default on the loan. - Spending All Of Your Savings
A down payment, closing costs, and prepaid expenses — purchasing a home requires buyers to bring a significant amount of cash to the table. However, you should avoid draining your savings if at all possible. Owning a home comes with significant expenses, and you never know when you'll need to invest in a major repair. In general, you can expect to spend 1% of the sale price annually on maintenance. However, if you have a major plumbing or roofing problem, you're looking at a much larger price tag. - Choosing The Wrong Location
Location plays an important role in your happiness and quality of life. It also affects your home value. Sometimes first-time buyers will fall in love with a home despite it being in a less than ideal location, which can have long-term implications. If you're looking for a great home in a great location, check out these Queens homes for sale. - Maintaining Good Credit
Your credit score is an important factor when it comes to securing a mortgage. A good credit score is also essential for locking the lowest possible rate. Make sure you're monitoring your credit report in the months in the months prior to your home purchase. Once you're under contract, make sure there are no drastic changes to your credit or financial situation; otherwise, your lender may have second thoughts.
Buying your first home can be intimidating, but with a little research and patience, you can avoid costly mistakes. Contact us today for more tips!