Common Mistakes First-Time Homebuyers Make — And How to Avoid Them

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1. Not Investing in an Inspection Before Closing

 

When Muna Mohamud, a nurse from Minnesota, bought her first home four years ago, she searched for the right home for about six months. Overwhelmed and exhausted by the process, she finally said yes to a four-bedroom house that was built in the 1970s.

"One mistake that I made - and that I'm paying for still - is that we didn't get a good inspector," she explains. "The house is old and I've already put so much money into repairs. Every other couple months there is something to fix."

When you purchase a newly built home, you are starting from scratch, so you don't have to worry about a major fix for years or that a seller is hoping the inspector will miss mold or other major problems. New homes are inspected several times throughout the construction process, giving homebuyers peace of mind. However, if you still would like an inspection of a new-construction home, speak to your builder about special requirements for the inspection.

 

2. Not Considering Different Housing Types - Like New-Construction Homes

 

Mohamud also regrets that she didn't give the thought of buying a newly built home a chance, because she felt like she wouldn't be able to afford it.

While newly built homes can cost more than a used home, you'll save time and money in the long run by not having to worry about costly repairs because everything is new and under warranty.

 

3. Not Considering The Quality of the Neighborhood and Schools

 

For buyers that have children or plan to have children in the future, looking at quality of the schools around your neighborhood is important. Mohamud assumed that since the home she bough was in a nice neighborhood, the schools were good too - that wasn't the case for the mother of five. 

"It's essential to assess the neighborhood before purchasing a home, " says Sage Singleton, a home maintenance expert for SafeWise in Salt Lake City. "If you have children, doing your research on the school district, its teachers, rankings and the route to school is important." 

Singleton says first-time buyers have to understand that while you can update your home, you can't change the neighborhood and all that comes with it.

 

4. Not Understanding How Much House You Can Afford

 

Looking at expensive homes is usually a fun activity that people do on the weekends and purchasing one can be something to aspire to when a buyer reaches a certain level financially.

When you are a first-time buyer, however, not knowing your budget before you go house shopping is a mistake that can turn you off to the houses you can actually afford and make the process less than thrilling.

"The biggest mistake I have constantly seen is when buyers go look at a home that is obviously over their budget," says Frank Casanova, a residential broker in Northern California. "They love it. And then when they begin looking for homes within their realistic price range, they are continually disappointed with what they see. It becomes a depressing venture for them and a difficult emotion to overcome." 

Lisa Carter, senior vice president of sales at Edward Andrews Homes, also lists this mistake as one she often sees and advises first-time buyers to get preapproved first to avoid upsetting yourself when home shopping.

 

5. Opting Out of the Homebuying Process Altogether

 

Feeling intimidated by the thought of going to a bank to ask for a home loan when you're a first-time buyer is understandable.

A lot of first-timers think that they won't qualify or would not get good rates and this often leads to the mistake of people never considering the possibility of homeownership.

Kathy Cummings, a homeownership solutions and education executive at Bank of America, says she sees this mistake all the time.

"Many new homebuyers self-select out of homeownership by assuming they won't qualify for a mortgage or that they need to put down 20 percent. Others simply don't know where to start," says Cummings. 

Bank of America offers first-time buyer programs like their Affordable Loan Solution mortgage, which is a loan that provides low- or moderate-income homebuyers access to a responsible lending product at affordable entry prices. 

In addition to banks offering first-time homebuyer mortgages, many states also offer government programs that are designed to help buyers who need a little help in actualizing their dream of owning a home. Again, a lot of buyers don't think they qualify for these programs or simply don't even know they exist in the first place.

"I frequently represent first-time homebuyers as my demographic begins to settle down," says Michael Kelczewski, a Millennial Realtor with Brandywine Fine Properties Sotheby's International Realty, who's licensed in Pennsylvania and Delaware. "Many states provide programs subsidizing a home purchase. Certain grants or tax credits may also be present."

Kelczewski says he recently had a client who obtained an $18,000 grant toward their closing costs and down payments. The grant originated from the federal government's enforcement of redlining. 

Cummings echoes the same sentiment about government programs that are out there for first-time buyers, stating, "buyers should find out if they qualify for federal, state, or local down payment and closing cost programs."

Yasin Mohamud is a communications professional and freelance writer based in Minneapolis

"Republished by permission of www.NewHomeSource.com", https://www.newhomesource.com/guide/articles/mistakes-first-time-homebuyers-make

 

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