Buying your new home is a big decision. It is one of the major investments of your life. Hence, it is vital that you are mindful of your decision. Especially if you’re a first-time homebuyer, it is important that you don’t sweep away at the moment and make hasty decisions that result in buyer’s remorse later. With a plethora of amazing properties in the market, you are susceptible to making mistakes while buying your properties.
In this blog, we have prepared a list of common mistakes first-time homebuyers make so that you can know what to do instead. Here are some pitfalls that you need to look out for!
What can go wrong in the home buying process?
Making a rash decision
For many first-time homebuyers buying a perfect property at an amazing price is like finding a needle in a haystack. So, they end up making hasty decisions and rush into purchasing properties without looking into various factors such as location, building structure, and amenities included. Beware! It’s important to be patient and understand what your requirements are before you start looking for your dream home. When you feel that you have found the best deal ever made, then it’s okay to look into all aspects of buying and selling and go ahead with making another important investment in your life.
Getting just one rate quote
If you feel that the value of your property is below the market value, make sure to ask for multiple quotes from real estate agents and brokers. If you get a better deal than what an agent suggests, then it’s okay to go with that one. The trick is doing research and asking enough questions regarding rates and taxes before you finalize anything.
Every seller quotes a price according to their own requirements, so if you find something too good to be true, then chances are that there is some kind of fraud involved or something fishy going on in the background. So, consider all factors such as location, building structure, and amenities included before finalizing any deal.
Every seller must follow the legal formalities necessary for selling a property.
Not hiring a real estate agent
This is one of the most common home-buying mistakes. Buying a house by yourself is also another mistake that new home buyers make every now and then. The main reason why you need an agent is to guide you through the process and help you close a deal without any complications. Going solo will only make things complicated for you, especially if your offer ends up getting rejected or even worst – gets ignored!
If it’s too expensive, keep looking for alternatives because properties worth exploring are out there and real estate services can help you get the best deal.
Overlooking legal formalities
This is one major first-time home-buying mistake to avoid. You might be so excited to finally buy the first home that you’ll forget all about legal formalities. You can even pay a down payment before the final sale is closed, but make sure it’s not more than 10% of the house price. Packing up and moving won’t be good for your credit score if the sale falls through after all, plus you will lose all your money spent on moving as well as those from your down payment.
Title insurance is an exception to this rule because it covers any risk involving property titles such as past-due taxes or outstanding liens against a property. It should only cost anywhere from 0.2-0.5% of the value of a given house.
Underestimating the costs of homeownership
You’re all set to buy the property but have you considered the other expenses that tag along? When you buy a house, other smaller incidents happen to require regular home maintenance. Tighten your belts because these costs can add up pretty quickly if not budgeted for! From gas bills, electricity bills to something that might seem insignificant as your pool or garden maintenance- everything will add up to your monthly expenditure.
Not buying enough home insurance
This common mistake has even led homeowners to sue their real estate agents when disaster strikes and they claim that they were not advised to purchase extra coverage for their homes. Given how expensive repairs tend to be, you would do well with purchasing at least 10 percent more than what was included in your home’s original purchase price.
Not understanding the closing costs involved in buying a home
When considering which house to buy, ‘closing cost’ is often considered as one of the biggest costs involved. However, it should be noted that this is only true if the seller and buyer agree on “closing cost,” which can also include prepaid items such as taxes and interest for a designated period.
Do research beforehand so that you can reduce any surprises by becoming familiar with common home-buying mistakes made in real estate transactions. This will also help give sellers better-negotiating terms since there is less chance of something going wrong. Never forget that this transaction could end up costing or saving you large sums of money in the long run so take care when making decisions!