Buying a home is a very exciting process, especially when it’s your first time. Your aim is to end up in a home that you love at a price you can afford. Take a look at these 5 first time home buyer mistakes and how to avoid them.

5 First Time Home Buyer Mistakes

Not knowing what you can afford

Perhaps one of the most common first time home buyer mistakes is when buyers don’t know what they can afford. Falling into this trap can lead you to major disappointment or financial burden. If you don’t already have a budget make a list of all your monthly expenses including vehicle costs, student loans, credit cards, groceries, insurance, etc. Doing this exercise will help you stay aware of what you can afford so you are headed down the right track from the very beginning of the home buying process. 

Failing to consider additional expenses

Just because your budget says you can afford a certain amount, doesn’t mean you should buy a home that reaches the maximum. Once you’re a home owner, you will have additional expenses on top of your monthly payment. Now that you’re a home owner, you’re responsible for home owner property taxes, maintenance costs, and hoa fees. The last thing you want is to move into a new home and then not have enough to maintain your new home.

Being too picky

Being too picky is one of the most popular home buying mistakes as it’s easy to get your heart set on a specific kind of home. First time home buyers often have to compromise on something, be it price, location, style, etc, since their funds are limited. Additionally, if you have tunnel vision for a certain type of home, you may miss opportunities because you’re only looking in one direction.

Neglecting the home inspection

The home inspection is one of the most important steps in buying a home, especially your first one. A home inspection gives you peace of mind that the home you’re moving into is working in all areas, and that the home seller needs to fix all maintenance issues before you move in. By spending less than $500 upfront, you’re ensuring that your furnace is good to go, your rood doesn’t need replaces, your crawl space is clear, and so forth. If you run into one of these issues down the road, it’s up to you and your wallet to fix it.

Not thinking about the future

Yes it’s great for you to get your foot in the market so you can start building equity. But be strategic when doing so. If you want to have kids down the line, say 3-5 years from now, it’s good to find a place that’s decently safe, and is in a good school district. Even though these factors may not be important to you now, you will thank yourself later so you don’t have to move for factors that could have been considered earlier. This can be one of the most costly first time home buyer mistakes.

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Buying a house is thrilling especially when it’s for the first time! The learning curve is steep, but doing a little financial homework can help you navigate the system and set you apart from the competition. Here are six first time home buyer tips and tricks to ensure your home buying experience goes smoothly.

First Time Home Buyer Tips & Tricks

Check your credit

As a first time home buyer, the more you know about your own financial situation the better. Your credit score is one of the most important factors in determining if you qualify for a loan. Simply, the higher your credit score, the higher the chances you qualify for a loan and the lower your interest rate on your mortgage. Visit Credit Karma for a free credit report that determines your overall score as well as areas of strength and opportunity.

Research agents

Not every agent is the best agent for you. Talk to your friends and family and see who they’ve had luck with in the past. You want your agent to be in your corner at all times, giving you confidence in the home buying process. Having a great agent will ensure the success of your transaction and give you peace of mind. Additionally, a great agent will have experience with first time home buyers like yourself and can have ready to go solutions for any bumps along the way.

Check out the neighborhood

Before you put an offer on a home, check out the neighborhood. A good rule of thumb is to avoid buying the nicest house on the block as it won’t appreciate as well. Remember, you’re not only buying a house, you’re also committing to the neighborhood, the block and general surroundings. Explore the closest grocery stores and shopping centers and decide if that commute is one you want to make on a weekly basis.

Schedule a home inspection

Just because the home you’re about to buy looks like it’s in good condition, it never hurts to get a home inspection. By having a professional inspector come to the skeleton of the house, you’re able to catch any red flags early on. For example, if the home inspector finds an issue with the roof, you can show the inspection report to the home seller and ensure that they fix the issue before you move in. Home inspections are generally under $500 and can save you thousands of dollars to fix issues you didn’t even realize where present in the house.

Be open-minded

As a first time home buyer, it’s easy to find what you think is your dream house and turn away any other options, passing up some hidden gems. Make a list of your non-negotiables and nice-to-haves so you don’t turn every bullet into a non-negotiable. Additionally, when homes in open houses are staged, they tend to complete your vision of living in the home. Don’t let this prevent you from buying an unstaged home, pay attention to the floor plan, moldings, and size or rooms.

Save up for closing costs

It’s not just the down payment you need to save up for when buying a home. You’ll also need to account for the closing costs, transfer tax, escrow fees and prepaid interest. By anticipating these costs when you first analyze your budget, you’ll avoid being blindsided by the costs at the end of the home buying process.

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