Top Mistakes First Time Home Buyers Make

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Everyone’s dream is to one be the proud owner of a home, however, that dream can quickly turn sour if first time home buyers do not know what they are getting into. Buying a home takes time, patience and sometimes luck. Before going for it and signing off on all the paperwork, read up on these common mistakes first time home buyers make and be prepared!

1. Skipping the Property Inspection: The property inspection is a key part of the home buying price. The results can determine what problems there may be and what negotiation leverage you may have. Ignoring the property inspection could stop you from discovering issues with your new home that you cost you later on. First time home buyers should hire an independent inspector and consider the results to stay safe rather than sorry later down the road.

2. Poor Budgeting: Budgeting is essential in the home buying process. You need to consider how much you can afford to pay each month before considering buying home. Have a long term budget plan that takes into consideration all property taxes and closing. Plan and be realistic with your budget. Consider all the details.

3. Paying Too Much for a Broker: The broker is a key player in the home buying process and many first time home buyers do not know that their commission can usually be negotiated. Before overpaying, you can try to get a lower rate from your broker. In tough economic times like we have now, most brokers are flexible and can work with you in order to save you time and money in the long run.

4. Bad Location: It may look like your dream home but if it is in a bad neighbourhood it may be wise to look elsewhere. You don’t want to deal with any long lasting consequences. Consider your commute to work, the crime rate, and overall safety. Fist time home buyers should always consider location, location, location.

5. Falling In Love With Your Dream Home Too Soon: Again, don’t let the dream house you envisioned for yourself cloud your judgement. The perfect looking home is no justification for spending too much money or sacrificing amenities you were hoping to have. Search objectively for a home that has the right mix of emotional satisfaction while still having common sense.

6. Not Putting Enough Money Down: Remember that the more money you put down on a home at the beginning of the home buying process the less money you will spend in the long run. This simple piece of advice is not always taken to heart by first time home buyers. A new home is an expensive investment and failing to put enough money down could cost you thousands of dollars in interest charges. You need to know how much you can afford and place yourself in the best financial situation possible.

7. Not Knowing Your Credit Report: Before going to the bank for a mortgage loan, you have to understand your credit report through and through. This is because any negative scores on your report could stop you from attaining a loan to begin with or prepare you for any nicks in the loan application process. For first time home buyers, getting a credit report is a tiny step tat can save a lot of time and stress in the mortgage process.

8. Not Protecting Yourself Contractually: We all know that sometimes, things do not always go according to plan. The seller may potentially back out or your financing could fall through. If you do not plan ahead you could end up with big consequences. If you have the resources you can talk to an attorney about your real estate transaction. For first time home buyers, lawyer fees may seem expensive but they can save them from ending up in problematic situations.

9. Not Doing Enough Research: Research is essential in the home buying process. You need to look at the neighbourhood, the price of the home, the reliability of your broker and of course the details of your mortgage just to name a few key areas. The home buying process must be treated with the utmost attention to detail to save first time home buyers money, time and stress.