You’ve finally decided that now is the time to buy your first home. Perhaps you’ve done the math and want to take advantage of the high percentage of affordable housing as well as historically low interest rates. Or maybe you have a new family that is quickly outgrowing your rental. No matter what the reason is though, purchasing a home is a big responsibility.
Because there’s a learning curve involved, first-time home buyers often make a number of mistakes. So, the more knowledgeable you become about the home buying process, the fewer mistakes you’ll make, if any.
Choosing the right Realtor
For instance, first-timers often underestimate the importance of finding the right real estate agent. Not all agents are created equal, and that’s important to know. Not only do their commission rates and experience vary widely, but every realtor also has his or her own unique personality. So you want to be sure and find an agent with great credentials, a long list of satisfied clients as well as someone who you are comfortable with and who you respect.
To find the best realtor for your needs, you first want to set up interviews with several different agents. Ask them specific questions about their business. How much experience do they have? What do they think the best strategy or marketing plan is for your needs? What makes them stand out from the competition?
Further, don’t be afraid to ask them how much they charge. Don’t ask if the fee is negotiable because all real estate fees are negotiable. Also ask for their testimonials and references.
Use your intuition as well in helping to choose the right realtor. How does this person come across to you, and does he or she seem to have your best interest at heart? If the answer is yes, and they meet all of the other qualifications, then you’ve probably found the right agent for you.
Determine what type of home you want
Another common mistake for first-time buyers is to not know the type of home they want. If you know ahead of time what you’re looking for, what you can actually afford, as well as what you’re willing to compromise on, you’ll be much more likely to make an informed decision.
The next error in judgment, for many first-time home buyers, is to not consider the home they are about to buy as an investment, which could end up being a very costly mistake. You want to compare the home you’re interested in to other similar homes in the neighborhood to make sure that it’s priced right.
Investigate home locations thoroughly
Also is it in a desirable location or next to a busy, noisy street? Further, is the home going to require a great deal of maintenance? These are all important factors to consider because, if in the future, you decide to sell, the goal is to make a profit or at the very least, to break even.
Most experts say you need to stay in a home for at least three to five years in order to break even. This time frame could be even longer if home values continue falling. So remember, home ownership is a long-term investment.
Work with a knowledgeable lender
Next, ask your lender lots of questions and be proactive about finding the best deal. Different lenders offer different rates so you want to research your options. Would you be better served with a 15-year or 30-year note?
Also ask questions about the difference between adjustable and fixed rate mortgages and find out about points, too. In addition, find out how much interest you’ll be paying over the life of the loan. The lender is there to serve you, so don’t be shy about getting the information you need.
Finally, you don’t want to be what’s considered a low-ball seller or greedy. This may be a buyers’ market, but if you offer too little or ask too much in concessions you may turn the seller off, and they might not want to sell to you at all.
Avoid these common first-time buyer mistakes, and you’re sure to have a rewarding experience with a beautiful home as the end result!
