Top Mistakes Homebuyers Make and How to Avoid Them
First time home buyers often find the process of searching for a home and securing a loan to be overwhelming. As a result there are common mistakes that can cost a buyer time, money and sometimes the home you are trying to purchase.
Here are a few of the most common mistakes first time home buyers make:
- Being too emotional. When looking at homes it is natural to instantly like or dislike a home based on how it feels. When you find the right home, part of that decision is made because of location and layout, the rest is emotional. Yet emotion can cause you to pay too much for the home or not see needed repairs.
After finding a home you love look at it with a critical eye. What have other homes sold for and what realistically can you expect to pay for the home. What repairs are needed and how does that impact the value. Then make a sound offer and know where your price negotiation parameters are from the start.
- Not being financially prepared. The best method is to become pre-approved for a loan before you begin house hunting. This will strengthen your offer and lead to a faster closing, which can be a real advantage in a seller’s market. It will also ensure you are searching for a home in the right price range. While the bank may approve you for a million dollar loan, do you really want the $4,500 to $5,000 monthly payment it comes with. Knowing where you stand financially and understanding what the bank will lend, will help you look and buy in a price range you will be comfortable with.
- Doing It Yourself. With all of the online tools the internet provides it may be tempting to do it yourself. You can search for homes online and take virtual tours without ever leaving the comfort of your home. You can apply for a mortgage and send in paperwork electronically without ever speaking to a live person.
The DIY method of home buying costs you the benefit a professional offers. With seller’s paying the real estate agent’s fees, there are no cost for using a buyer’s agent. Lenders charge the same whether you use their online features or talk with a lender. Take advantage of these professional services and let them do as much leg work as possible. This will save you both time and money in the long run.
- Having too much faith in online information. Calculators, rate information and home values can be readily found online. These features offer a ball park but do not take your personal needs into consideration. You are making the largest purchase of your life and having your personal information considered will give you a significant advantage. When making an offer you want real sales data on homes, not just online estimates. When choosing a loan program you want a live person to review your options based on actual circumstances, not for someone who may or may not be like you. There is no substitute for speaking to and working with live professionals. Online information provides guidelines and frameworks but cannot be relied on for its accuracy.
- Unrealistic expectations is another pitfall for first time buyers. Thinking you will get a foreclosed home needing no repairs or having a home where every imperfection is corrected is not realistic. Searching for the perfect house will result in not making a purchase. There are no perfect homes and every home comes with flaws. If the home is priced lower than market value, there is a reason. Understanding these realities will help you keep expectations in line with reality.
Most physicians do not have time to waste on an unproductive home search. Utilize the professionals that know the market and understand the needs of doctors. This will enable you to focus on what you are best at, and save you time and money in the process.