Experts Reveal the 10 Big Mistakes First-Time Homebuyers Make
Article reposted from ApartmentTherapy.com, September 29, 2018
by Lambeth Hochwald
You've been squirreling away dollar after dollar and finally have a pile big enough to consider buying your first home. That's the good news. The not-so-great news: First-time buyers are prone to making some pretty big mistakes.
"Home sales have gone up and many first-time homebuyers are coming down with a case of home-buying FOMO," says Tanya Hobson-Williams, an attorney in Jamaica Estates, New York. In fact, 68 percent of millennial homeowners said they felt buyer's remorse after purchasing their home, according to a Bank of the West study published in July. "They will put the deposit down, move in, and then feel that case of buyer's remorse because they realize that it's not the house they wanted," says Hobson-Williams.
All the more reason you should take your time. Read on for the 10 things you should never do in your quest to find your first home sweet home.
Mistake #1: Prioritizing the house over the town
Selecting the right town is crucial, says Alison Bernstein, founder of Suburban Jungle, a real estate relocation firm dedicated to helping young families leave urban areas for the suburbs. "The goal is to find you and your brood a place where the culture and values of the town match yours. You can always trade up or down for a new home, add a third bathroom, or renovate a basement."
Mistake #2: Limiting your search by your commute
It's never a good idea to buy a house just because it's super close to your work. "Just 10 more minutes on the train or bus could perhaps score you a lot more for your money," Bernstein says. "In addition, you want to be flexible about a train station. Though a town may not technically have 'a train in town,' you may be just five to 10 minutes in the car to one or many neighboring stations."
Mistake #3: Buying too much (or too little) house
Size very much matters when you're shopping for your first house, and while the thought of finally having a space you will own for years is exciting, you can also very easily miscalculate and end up with too much (or too little) space. "Some homebuyers might purchase a house that has more rooms than they need, while others might try to pack in 10,000 square feet of stuff into an 8,000-square-foot house," Hobson-Williams says. If you're house hunting with a significant other, make sure you have a frank conversation about how large the house should be and how much space you truly need.
Mistake #4: Being disorganized about your paperwork
Like most things in life, preparation is key and it's especially important when you're buying a home for the first time. This means getting pre-approved for a mortgage, checking the title for liens on the property, conducting a home inspection, and looking at your own credit report. "Your pre-approved mortgage is an especially important gauge of how much you can afford," says Jamie Blades, CEO and founder of Homicity, a real estate marketplace site. "You'll also look confident to the seller and you will have what's needed to make an offer right away if you find your dream home." Pro tip: Keep your papers together in a designated folder or organizer.
Mistake #5: Thinking you need 20 percent down
Maybe you'd love to home shop on the weekends but you aren't quite ready with cash in hand. Turns out, you don't need 20 percent down to buy a home, says Michael Pacheco, a realtor at Real Estate Just for You in Nashville. "A lot of people I speak with—and even buyers who have purchased a home before—don't know that you don't have to have 20 percent down to buy a home," he says. "There are many first-time home buyer programs out there, and with government loan programs, a first-time home buyer can get into their home with as little as 3.5 percent down. There are also state-based programs that will give you up to five percent of the purchase price towards down payment and closing costs."