You’ve finally found your dream home; now it’s time to make the purchase. But there are a lot of details to contend with and decisions to be made. To help you avoid these common pitfalls that could complicate the process, here are 10 mistakes to avoid as a first-time homebuyer.
Do Not Buy From A Pushy Salesman
Many first-time homebuyers are told to go through the broker (real estate agent) for the most reliable information about a house. Brokers who are overly friendly toward sellers and have no intention of helping you get a good deal may sometimes pressure you to buy from them because they stand to gain a commission, or fail to give you full information about the house’s problems or defects.
If you’re not sure if you want to be a homeowner, don’t buy one that needs work. Instead, wait until you’ve had more experience and can find an affordable place where all the work is already done (or where it can be done by yourself). The closing costs on a fixer-upper are usually more than what you would pay on a ready-to-live-in home.
Do Not Make A Hasty Decision
Buying a house takes time, and so should you. Take the time to get acquainted with the area and know where you want to live before starting the buying process. If you have found a house that you can afford, but it isn’t in your ideal location or neighborhood, consider renting for a while until you decide where it is best to settle down.
Make An Uninformed Offer
You may be anxious to get a deal, but when you make an offer on a house, you are making a legal contract. You should have a good idea of how much the house is worth in your area and be prepared to back up your offer with the money and other resources to fulfill the contract.
Avoid Breaking Escrow
Escrow is the process of having third parties holds funds for both buyer and seller. If you break escrow by backing out of buying a house for any reason, this counts as breaking escrow, which leads to the cancellation of both your contract and the sellers. This also applies if you decide not to buy from a broker who is also involved in escrow.
Turn down A Good Deal to Get a Bad One
It’s usually not smart to just settle for something that is “reasonable” because you want what you think is a better deal. Instead, shop around for the best deal and then make an informed decision based on your needs.
Buy for the Wrong Reasons
Buying a house is about getting an ideal place to live, but it can also be about looking for an investment opportunity or a way to maintain wealth. If you buy because of these other motivations, you may end up wasting time, money, and energy that could have gone toward making your home a great investment or staying in it long enough to recoup your investment.
Whether you are a buyer or a seller, it’s best to be truthful about your intentions and abilities. For example, if you are lying about how much money you can afford to buy a house, this will affect the negotiations. Additionally, even if your intention is not to lie, it’s best to be honest about any potential problems with the purchase (or lack thereof) before starting the process.
Do Not Ignore Health and Safety Issues
Most first-time homebuyers have no idea what they are getting themselves into when they buy a house. For example, if you have a family, most houses have asbestos, lead, and other toxic materials that can make you sick. You should do your research before buying a house and be sure to hire an inspector to assess the current state of the house’s problems. Most reputable inspectors will tell you about these issues before you sign your purchase agreement (or in some cases, after it has been signed).
Do Not Buy an Unneeded House
Sometimes it’s better to just rent than buy something that might not suit your needs or lifestyle. Once you’ve bought a house that doesn’t fit your needs, you will be tied to it for the long term, only to regret not having rented it before buying.
Most first-time homebuyers make mistakes when buying a house, but its good news that most of these mistakes are avoidable.