5 Foolish Mistakes First-Time Home Buyers Make

Buying a home is exciting, especially when you're buying for the first time. In the midst of all of the excitement, it's easy to become blinded by beautiful back-splashes, granite and quartz counter tops, hardwood floors, and fenced-in backyards. However many home buyers--1st time and seasoned—sometimes make the following 5 mistakes when considering which home to purchase.

1. Overspending

Before you even look at a single property, you need to know exactly how much you can afford. There are several online calculator tools you can use, but these tools are only estimates. Use these tools as a guide, but then adjust the amount based on your individual situation.  Meet with a lender and get pre-approved for an amount you can afford. Once you know how much you have to work with, then and only then should you start your house hunt.

2. Counting chickens before they hatch

When determining how much mortgage you can afford, base this amount on what you are earning today. No one can predict the future, and although you may very well be in a better financial situation a year down the road, there is no guarantee.

3. Failing to account for closing costs, property taxes, HOA, and homeowner's insurance

When you rent a home, you generally only have one payment — rent — and then maybe renter's insurance, which is optional. However when you buy a place, your mortgage payment is only the beginning of an array of costs. Remember to consider just the following three: condo fees, home ownersinsurance and property taxes.

4. Failing to protect yourself with home inspections, contingency clauses, etc.

Home inspections provide you with some protection. The inspector will be able to find problems that you can't and you want to know these problems before you sign on.

5. Being too naive or too paranoid

Some first-time home buyers are naive. Overly optimistic, they think nothing could possible go wrong. If a home has a few problems, they view them as easy fixes and are unrealistic when it comes to the cost and time it takes to fix up the home. Some naive buyers will move to a neighborhood on the wrong side of town, forgetting that you can fix up a house, but you can't change your neighborhood or location without moving.

Paranoid buys are sometimes difficult to work with. They may not believe the price is an accurate assessment of the house's market value. They'll submit low-ball offers and then show frustration when they are consistently rejected. Paranoid buyers don't trust real-estate agents, and may even try to buy their home without an agent, which is generally an unwise choice.

The above article was written by Erika Rawes and was obtained from www.usatoday.com.

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