There are so many different reasons that people can have for wanting to buy a home. Maybe you’re getting married, looking for more space for your expanding family, or want to stop renting so you can pay your own mortgage instead of your landlord’s. Whatever your reasoning is, you’ll want to be sure to avoid these top 4 mistakes!
#1. Let’s talk about “Agent Hopping” – This is something you’ll want to avoid doing when it comes time to start the home buying process. To be a successful home buyer, you need to be educated, prepared, and positioned for success by having someone representing YOU! If you think you don’t need an agent and will just call the person who listed the home if you want to see it, you have to remember that they represent the seller. You will be missing out on education about the process and recommendations on how much you should offer or any potential red flags.
You should research agents BEFORE you start looking at homes so you can find someone that you trust to be your advocate through the whole process. Buying a home is likely the biggest financial investment you will make, so you don’t want to leave it up to chance!
#2. Miscalculating the costs involved – You’ve looked at the purchase price and figured out how much of a down payment you need, so you’re all set – right? Not so fast! There are other costs associated with buying a home that a lot of first-time home buyers don’t take into account. Your down payment will probably be the biggest part, but there is also the earnest money (hand money) deposit, the home inspection & additional inspections you elect to have done, appraisal fees, and closing costs that you will want to talk to your Realtor® and lender about.
On the financing side, your lender will be able to give you a estimate of closing costs and how much you will need up front for homeowner’s insurance and taxes. These estimate cost sheets are very helpful to understanding what purchase price you should be focusing on – just because you are pre-approved for a certain amount doesn’t mean that you will be necessarily comfortable spending that amount! Some lenders offer first-time home buyer programs that can help to reduce some of these costs, and sometimes you are able to ask for seller assist, which is closing cost credit from the seller. These are all options that you’ll want to discuss with your agent and lender so you fully understand how they work and how best to use them.
#3. Skipping the home inspection – Home inspections are not necessarily required to purchase a home, and some buyers see it as a way to save some money on up-front costs or to make an offer stronger; however, I HIGHLY, HIGHLY advise against skipping this step. Having a home inspection gives you the opportunity to find out about any major issues the home could potentially have, such as safety or structural issues, as well as smaller repair items that need to be addressed. The home inspector is there to spot any major red flags that could cost you a lot of money if you don’t figure them out before closing, and in some cases, may be big enough issues that you decide you don’t want to move forward with purchasing the home. Your agent will have home inspector recommendations or feel free to do your own research, but you definitely do not want to skip over this vital piece of the transaction!
#4: House hunting with a pre-approval – If you’ve been out there hitting up Google on where to start to buy a home, you no doubt have heard that a pre-approval is an absolute necessity (if you plan on pursuing mortgage financing). For starters, a lot of agents will not show you a home without one and most sellers won’t entertain your offer without one. When you are in a competitive market trying to buy a home, not having this piece of the puzzle in place could cost you your dream home. Good news though – getting pre-approved is generally a pretty quick process!
Lastly, if you haven’t found a lender or gotten pre-approved, you may actually be looking at homes that are outside of your budget. Lenders look at your credit score and your debt-to-income (DTI) ratio to determine what loans you qualify for and your pre-approval amounts. With that, some loan programs require higher or lower down payments than others. Knowing exactly what you can be pre-approved for will help to eliminate this unknown and have you shopping for a home with more confidence that you can be comfortable with what you can afford.
If you’re ready to start the home buying process now, make sure you’re avoiding this big mistakes! If you want to discuss all of this in more detail, feel free to reach out and we can set up a time to grab coffee or chat over Zoom! I love educating buyers about the ins and outs of the home buying process to ensure they have the best experience possible & to help avoid any potential big mistakes along the way!