Buying your first home is a big and exciting step, to say the least. Just because you're new to the process doesn't mean you can’t do your research and be prepared. By doing so, you won’t make these rookie mistakes.
1. Not knowing how much house you can afford
Before you get picky about countertops, have your finances in order. One of your first steps should be attaining mortgage pre-approval.
2. Assuming foreclosures are great deals
The old saying "too good to be true" often applies to foreclosures. First, decreases in home values can mean the house you're getting isn't the deal of the century you thought it was. Second, foreclosures are notorious for having repair issues, especially if they've been vacant for a while. It’s safest to proceed with caution.
3. Letting your true feelings show
As personal as homebuying is, don't lose sight of the fact that it's ultimately a formal transaction involving your money. Maintain a poker face to avoid being taken advantage of.
4. Failing to find a good buyer's agent
Find someone you trust, someone who has your best interests in mind, and knows what you’re looking for.
5. Underestimating the costs of owning a home
Remember when you were a renter and you could call the landlord when the A/C broke and the toilet overflowed all on the same day last August? When it's your house, it's your responsibility. Don't fail to take into account upkeep when calculating how much house you can afford, especially if it's an older home.
6. Failing to budget for property taxes
Budgeting in all aspects is important, especially when it comes to property taxes.
7. Assuming your first offer will be accepted
As much as we would hope for this to be true, we know that often times it isn’t.
8. Skipping the inspection
Looks can be deceiving. That charming bungalow could be hiding some nasty surprises like structural issues or wiring that belongs in a museum. The inspector is your friend, especially if he has bad news!
9. Doing too much too fast
So you've got the house and you're ready to go full-on HGTV, tearing down walls and retiling the bathroom. Have some patience. Live in the place for a year, figure out what you really want, and go from there. And don't overextend your efforts thinking you'll get it all back when it comes time to sell.
10. Failing to include a contingency clause in the contract
A contingency clause protects you and the buyer in case all doesn't go as planned. Some of the more common ones are the house sale, subject-to-financing, and subject-to-inspection clauses. If the contingency isn't satisfied, your offer can be withdrawn or modified.