Saturday, February 20, 2021 / by Teresa Dipeso
First-Time Home Buyer Mistakes
To ensure a smooth and successful experience, there are a few common first-time homebuyer mistakes to avoid:
1. Not Using a Real Estate Agent
While you might be able to house hunt on your own, there are many aspects of buying real estate that can be confusing to first-time shoppers. A real estate agent provides an essential service that you can rely on for negotiating offers, organizing inspections and other details. A good realtor's experience is valuable and can help guide you through the process. In addition, whatever money you might save on commissions could easily be spent on a botched offer or overlooked repairs that could be avoided with the help of an agent. I have been an agent for 25 years and have seen it all!
2. Not Using the RIGHT Real Estate Agent
Not using a real estate agent has its issues, but so cannot using the RIGHT real estate agent. You don’t want to be halfway through your home search and then realize your real estate agent isn’t right for you. To avoid this, pick someone who not only has the experience needed, but the character that will make your process smooth and drama-free. Also, mortgage professionals are great resources to help you build your entire home buying A-Team! Also be sure to speak with your potential choices before you commit.
3. Getting Swept Away
While love at first sight is a good thing, it is always best to air on the side of caution when purchasing a new home. As one of the largest purchases of your life, it is ideal to keep an open mind when house hunting to ensure you are not jumping in too fast, going over budget or ignoring potential pitfalls. However, with the market moving as quickly as it is, and with no change in sight, when you DO find the right home, it's important to make your best offer first.
4. Going Over Budget
When it comes to house hunting, budget is everything! As much as you might love the idea of that extra bedroom or a popular neighborhood, it is in the best interest of your future not to go over your predetermined budget. You don’t want to sacrifice your retirement savings or emergency fund and overextending yourself could put your investments - including your home - on the line.
5. Fixating on Lowest Interest Rate
While a low interest rate has its perks and can be important, it should not come at the expense of heavy penalties or restrictions. When it comes to a mortgage everything from terms to penalty calculations to interest rates matter. Ideally, you want to choose a mortgage product that has the best overall contract to serve your needs - now and in the future. To ensure you are making the best decision, talk to a mortgage professional about all your options today.
6. Opting Out of Mortgage Insurance
Buying your first home is easily one of the largest investments you will ever make. Mortgage insurance can help you protect it. Not only does it provide you with peace of mind and coverage should anything happen, but mortgage insurance can also allow for more flexible financing options. In addition, it gives you the opportunity to take advantage of available equity to pay debts or make financial investments.
7. Not Researching the Neighborhood
The house of your dreams can only go so far if it is in the wrong neighborhood. Annoying neighbors or a nearby industrial zone can ruin that perfect home. Before committing, it is a good idea to get to know the area and the neighborhood before you make an offer. Talk to local business owners and residents to determine if there are any red flags you should know about.
9. Choosing a Fixer-Upper Based on List Price
A fixer-upper can be a great project - and of course a low price is appealing - but it is important to be extra diligent during inspections and considerations for these types of homes. On the surface, it might look simple enough to get the home up to code and give it a fresh new look but once you get started, it could be a bigger project than you anticipated. Negotiating a long due-diligence period can be a great option to provide you time to get estimates from contractors in case you need to back out.
10. Immediately Starting Renovations
Renovations can be fun and can often increase the value of your home, but there is no need to rush into them. In many cases, overextending your credit to get upgrades done quickly doesn’t always pay off. Before doing renovations, take time to ensure that you have a solid plan and understand the financial expectations so you can complete and enjoy your renovations without future stress! Living in your home for a while before renovating will also help you plan the best functional changes to the layout. If you are new to homeownership, don’t worry!
Teresa & The DiPeso Group mortgage can help walk you through every step of the process and provide helpful insights and potential referrals to help you build achieve your real estate dreams.
Call or text today: 609-780-1434