Updated: Nov 6, 2019
The home buying process is a big decision. As things start to get exciting, it's easy to overlook a few things and make some mistakes that are sure to sour the occasion! To help you avoid that, here are the 5 biggest mistakes I see first-time homebuyers making and advice on how to avoid them.
A lot of new home buyers start looking at homes with a much higher budget in mind than they can actually afford. If you are not buying in cash, a good way to figure out what price range to shop in would be to work backward from how much you want to pay each month. There are plenty of free online mortgage calculators that will let you figure this out based on what you want your monthly payment to be.
2. Not working with your lender
The importance of communicating with your lender throughout the process cannot be stressed enough. If you send in an offer on a house that you think you can afford and come to find out the bank won't lend you enough to go through with it, you're in for a rude awakening. Get pre-approved before you begin searching for homes so that you know what price range you can reasonably afford. The bank may be willing to lend you more than you want or need, so don't feel like you have to borrow up to the limit if you would rather have a smaller and more comfortable monthly payment.
3. Not considering additional expenses
It is important to realize that the purchase price agreed upon on your new home is not the only cost in the transaction that you should think about. Make sure you have accounted for the cost of the option fee, earnest money deposit (typically a percentage of purchase price), any Home Owner's Association dues, closing costs, etc. Depending on your area these can all be different, so speak to your Realtor for more guidance.
4. Not getting an inspection
Potentially the most fatal mistake, in my opinion, is not spending the money to hire an inspector. I would much rather pay a few hundred dollars to find out my house is in perfect condition than save a few bucks and come to find out after closing that my home needs thousands of dollars in repair. With a home being one of if not the largest purchase that most people make in their lifetimes, it is absolutely worthwhile to hire an inspector to determine the condition of the property.
5. Planning ahead
This one is easy to forget in all the excitement of touring homes and looking for the right one. It is important to consider your own future needs and how the house will meet them, as well as future resale value. If you plan to have a quickly growing family, you might consider buying something with more room to grow into rather than something that will be outgrown in a year. When you do find your dream house, think about where it is. When you decide to sell it and move in 3-5 years, will you be able to get your money back out of it, or make a profit?
I hope you found these 5 tips helpful! If you're considering starting the homebuying journey, or have any questions regarding the process that you don't see here. Feel free to shoot me a message here.
Matt Moreland, Realtor® is a real estate agent serving the Lubbock, Texas and the South Plains. After graduating with a Bachelor of Business Administration in Finance with a concentration in real estate from Texas Tech University, he began practicing real estate full time at McDougal Realtors in Lubbock, Texas. Matt enjoys spending time with his wife and their dog. Some of his hobbies include investing in real estate, elk hunting, backpacking, barbecuing, and playing guitar. To schedule a commitment-free consultation please call 469-744-3610 or fill out this form to get started.