Doing anything for the first time can be confusing. Make sure to avoid these bloops, and you'll have a smooth process!
1. Using the wrong loan type and not taking advantage of local grants and programs. Make sure you talk to an experienced REALTOR® that will set you in the right direction. Not all lenders are licensed or qualified to take advantage of local programs, of course, they will not tell you there is a better product out there so do your research.
2. Waiting too late to start their home search. You need to give yourself 3-4 months before the end of your lease or start of a new job to make sure that you have enough time to find the right home at the right price.
3. Not understanding closing costs. Buying a home is more than just a down payment so make sure you understand all the costs and fees involved in purchasing.
4. Skipping a home inspection to save money. Never a good idea.
5. Hiring an inexperienced REALTOR® or mortgage lender out of obligation to a friend or family member. This can be a tough decision but it’s probably the most important financial decision of your life. Ask your friend or family member for a referral so they can be part of the process and share in your experience.
6. Buying a home that’s simply too far away. This is a mistake I see far too often. Make sure you think about your future when buying a home because there is one thing you cannot put a price on and that’s… time. If you have to travel over an hour to work and you have a family think about those 2 hours a day and how important they are.
7. Buying a “starter home.” Back in 2005 many people thought they were going to buy a starter home (including myself) and when the bottom dropped out they were stuck. I give every buyer the same advice; “Do not buy a home that you wouldn’t be happy in for 10 years.” There are no guarantees where the market and home prices will go to make a smart decision.
8. Spending the maximum amount on their pre-approval. Your purchase should be made on the monthly payment and not the final purchase price of the home. Don’t leave yourself “house poor.”
9. Not starting the pre-approval process early enough. If you are unsure of your credit circumstances and savings make sure you start working with a reputable mortgage lender early in the process. Many credit issued can be resolved in just a few months but don’t wait until it’s too late.
10. Having unrealistic expectations. I have buyers that have been looking for over 3 years for the “perfect home.” In those 3 years, they have spent over $30,000 on rent and could have made that home that wasn’t quite perfect more than adequate. Be realistic with your wants, needs, and expectations so you don’t drive yourself crazy!