The home buying process is both a science and an art. It requires knowledge, skill and finesse to navigate smoothly through the often rough waters.
If this is your first time buying a home, we’ve got you covered. We’ve created a list of the 7 critical mistakes new homebuyers make when purchasing their first home to help make your first home purchase go as smoothly as possible.
We hope this information helps you avoid costly mistakes that could have been avoided with a little tact and care. Our goal is to leave you feeling confident and happy with your first home purchase for many years to come!
1. Skipping the Home Inspection
Always always always get a home inspection. It may seem expensive but it's worth every penny in the long-term.
Termite damage, plumbing, mold, mildew and structural issues are the tip of the iceberg when it comes to potential problems you could face. Screen for issues now, save money later.
There has been a growing trend in hot competitive markets to skip the home inspection process as a means to stay competitive. Unfortunately for a lot of new homebuyers this is a huge mistake and should be avoided at all costs!
A home inspection is a wise investment that will alert you of any and all potential problems and hidden costs so you can make a well-informed purchase decison that won’t break the bank.
HOT TIP: Make sure you are at the property to get the home inspector’s summary. This will give you the opportunity to ask thoughtful questions based on his assessment and get answers and insights on the spot. If you can’t make it to the inspection, have your agent record the summary in person so you can watch the video and follow along with the report later.
2. Not Knowing What You Can Afford
It’s important to get your finances in order before you start looking for a house and spend within your means. I know this is the most unsexy thing you could possibly hear right now. But this one tip alone will save you a lot of time, headaches and money.
When it comes to buying your first home and investing in your future you’ll want to leave the ego at the door and shop within your budget. We’ve all been brainwashed into thinking we should go bigger and better in order to keep up with the Kardashians and that will make us happy but this just isn’t true.
Buying a house you can actually afford will help you avoid a lot of financial stress so you can live a long healthy and happy life.
Write this down. Long and happy life = Sexy.
DO get pre-approved for a loan
DO Budget for your first home
DO Consider additional expenses
DO NOT View homes that are outside your budget
DO NOT Forget about the hidden costs of home buying
DO NOT Get ambushed by closing costs
DO NOT Bank on your home's value appreciating
*These are all things a good agent can help you with
3. Not Taking Into Consideration Repair Costs
"We calculated that we could afford a mortgage payment higher than our rent, but didn't even consider the costs of upkeep. Now we're barely making it by month to month after a few repairs. First time homeowners ... you learn only after making a mistake."
-New Home Cries Out for Help via Reddit.
Believe us. Stuff will break.
Thinking you can do all of the repairs around the house yourself to save money is a huge mistake many first time homebuyers make. Sure there are basic things you can do yourself or through a friend or uncle to save on labour costs, but some things are best left to skilled professionals. eg. complicated jobs, such as plumbing, electrical work, and tile setting.
These repairs can easily set you back thousands of dollars at any given moment which can leave you in a bind. Make sure you factor these hidden costs into your purchase decision and you will thank us later. Another option is to ask the seller to foot the bill for a home warranty plan for the first year you are in your new home. This coverage can help reduce the expenses that come with common repairs for normal wear and tear on appliances and systems.
4. Not Thinking About the Future
A lot can change in 7-10 years. Did you ever imagine this is where you would be 5 years ago?
Odds are this won't be your last home. You'll likely sell it and move on in 7-10 years. Keeping this in mind will help put things in perspective so you can make a better purchase decision in the now.
Having a clear vision of where you are going and understanding that things WILL change will help keep you semi-detached from the emotions that can sweep you away in the heat and passion of buying your first home.
Take a step back and breathe. Consider what your life and future might look like in 7-10 years. Then make the best purchase decision based on that vision rather than present circumstances. Trust us, you’ll be a lot happier in the long run.
5. Falling In Love with a House
Love is a good thing. But not when it interferes and gets you into a bind. It’s important to check the (wrong) emotions at the door when buying your first home.
We get it. Buying a home is a very exciting thing. It’s easy to get lost in the romance. If you’re not careful this can sometimes bite you in the butt. There’s a song written about this you should probably listen to here.
Fools rush in. Falling in love too fast can lead to compromising on the things most important to you. This is not only true for relationships but your first home purchase as well.
A good real estate agent is like a best friend who slaps you in the face (not literally) when you’re about to make a bad decision with the wrong partner. They will help you take a less emotionally invested, tactical approach to getting you the best damn house you can afford.
One that will leave you happy, whole and smiling for years and years to come!
HOT TIP: A good agent will help you negotiate better terms, uncover hidden opportunities and score you lower prices which can easily be overlooked when you are blinded by love.
6. Forgetting that everything is negotiable
New homebuyers often don’t realize that there is almost always room for negotiation. A great agent will help you save directly by negotiating a better price, or indirectly by getting creative with certain concessions, such as repairs or closing costs.
HOT TIP: Real estate agents are expert negotiators that can help you save a lot of money. Do some research on your agent, get some feed back from friends that have used them in the past, and learn more about their track record with negotiations.
7. Not Choosing to Hire an Agent
Not hiring a great real estate agent can quickly turn into a nightmare for first time homebuyers not familiar with the home buying process. Agents look out for your best interests and can help you uncover things you may miss, helping you save money and avoid making costly mistakes.
A good agent will hold you by the hand and ensure you’re taken care of from start to finish so you can have peace of mind knowing you’re making the right purchase decision.
There is no doubt that purchasing your first home can be an exhilarating and emotional ride. We hope the tips we’ve shared above will help you avoid a few (if not all) of the pitfalls that many first time homebuyers face when purchasing their first home. If you would like a more detailed list, check out our Home Buyer's Checklist!
Ps. If you are a seasoned homebuyer reading this, let us know some of your own tips in the comments below!