It?s finally time to buy your first house! Yay; cue the band! ! I bet you can?t wait to tour some neighborhoods and get your paws on your dream home. Of course, before you take that first big step, let?s take a second to think this through. After all, it?s a huge, life-altering decision, and unfortunately, lots of first time homebuyers make the mistakes below.
Read on to make sure you?re not one of them!
1. Falling In Love With The Home?s D?cor. How many times have you watched HGTV and seen prospective buyers ooh and ahh over the gorgeous wall color or say things like, ?I just love that bed!? Although you can totally ask the realtor to try to include buying the bed with the purchase of the house, chances are the d?cor is not going to stay with the house. Instead, first time homebuyers should focus on everything that is difficult to change, like the size of the lot, the layout of the home, and the number of bedrooms and bathrooms. Those are more important than anything else.
2. Not Seeing The Potential. Similar to the above mistake, there are many first time homebuyers who completely pass over a house because it has endless wallpaper or a neon yellow bathroom. I get it; renovations are stressful. Just remember, though, that if everything is in solid working condition, there is no rush. Houses that have fancy pants kitchens, finishes, and floors are often much more expensive than the ones that are coated in granny?s floral wallpaper. Try to see the potential; it will only take you a weekend to remove wallpaper in one room.
Related: 6 Reasons You Shouldn?t Buy a House
3. House Hunting Before You Get A Loan. One of the first steps you should take when you are ready to purchase a house is to get pre-approved for a loan. Only then will you know how much money you have to work with. It?s pretty devastating to see your dream home only to realize you can?t have it because you don?t have your funding in place. So, start early, get your loan papers organized, and then shop ?till you drop.
4. Buying a House for the Total Loan Amount. Chances are, you?re going to get approved for a lot more money than you can afford. Don?t make the mistake that thousands of homebuyers have made the past few years. A house isn?t worth it if you?re going to be struggling to make your payments and getting stressed. Lots of people have to work towards their dream home, starting with smaller spaces and eventually working up to nicer amenities once their salaries allow it.
5. Ignoring Their Credit Score. When buying a house, your credit score is so important because it determines whether or not you?re going to get a great interest rate on your loan. So, if you don?t have a good debt to credit ratio or you have some adverse accounts on your credit report, take care of them before you start house hunting so you can lock in the best rate possible.
Related: 15 Hidden Costs Of Owning A Home
6. Not Realizing Hidden Costs. If buying a house was just about buying a house, then the process would be easy. Unfortunately, there are tons of other costs involved like fees for credit reports, appraisal costs, homeowners insurance, property taxes, and realtors? fees. There might even large problems you need to fix immediately that the current homeowners won?t, like putting on a new roof. Calculate these expenses into your budget to make sure you don?t get a nasty financial surprise during the process.
7. Being Inflexible. First time homebuyers have so many hopes and dreams for their first place. I totally understand this as I have tons of ideas of how I want my first house to look too. The thing is, though, that unless you build your own house from the bottom up, the house you buy isn?t going to be perfect. There?s going to be something that doesn?t match your list exactly, whether it?s the neighborhood or the number of bedrooms or the type of floors. Remember that some things are easy to fix and some aren?t, so try to be flexible when possible and realize that no one gets everything on their wish list.
8. Ignoring Resale Value. Even if you plan to live in your house for a very long time, life is truly unpredictable. You could get a job across the country or have some other life-altering event create the need for a move. So, even if you aren?t planning on resale, the resale value of your house is still important. One mistake many first time homebuyers make is buying the nicest house in the neighborhood or updating the house too much. Remember to take a close look at the neighborhood and make sure you aren?t updating your house so much that you price yourself out of it.
9. Not Hiring An Agent. While most first time homebuyers use a real estate agent, there are a select few who decide to go it alone. Even though there are real estate fees involved, it?s really important to get that expert opinion when it?s your first time buying a home. There are tons of rules and fine print, and your realtor will be your biggest advocate.
10. Not Considering Future Changes To the Neighborhood. Many first time homebuyers fail to look closely at the neighborhood and surrounding areas. Is there a big empty lot by your house that could be zoned for a huge apartment complex? Is there a school nearby? Is there an airport nearby? Before you fall in love with the house, be sure to predict how the neighborhood around it will change and develop over time.
11. Not Getting It In Writing. It?s nice to think that houses can be bought with a handshake, but the truth is, if sellers get a better offer, they?re likely going to take it. These days, you just have to get everything in writing, so if a seller accepts your offer, make sure that you have all the paperwork to go with it.
Ultimately, buying a house can be a really fun and exciting process; however, it can also be expensive and heartbreaking if you aren?t prepared. So, make sure to avoid all of the mistakes listed above during your house hunt so that you can confidently and comfortably move into your very first home.