10 First Time Buyers Mistakes

The ultimate dream is to find a home you love at a price you can afford. Many people make mistakes that prevent them from achieving that simple dream. Educate yourself with these tips to get the most out of your purchase and avoid making 10 of the most costly mistakes that could put a hold on that sold sign.

Subtract this total from your take-home pay and you’ll know how much you can spend on your new home.

If you have poor credit or unstable income be aware that what you think you can afford and what the bank is willing to loan may not match up. If you sign a contract and discover later that the bank won’t lend you what you need or won’t give you a mortgage you find acceptable. Should you cause the deal to fall through, you may have to forfeit the money that you put up when you went under contract.

You now will be responsible for paying property taxes, insuring your home against disasters and major repairs like air conditioning or roofing expenses.

Include everything on your wish list but keep in mind first-time homebuyers often have to compromise on something because their funds are limited.

Look beyond the unsightly wallpaper, carpet and paint for a while in exchange for getting into a house that you can afford. If the house meets your needs in terms of the big things that are difficult to change, such as location and size, don’t let small imperfections turn you away. Doing home upgrades yourself, even if you need to hire a contractor, is often cheaper than paying the increased home value to a seller who has already done the work for you.

Minor upgrades and cosmetic fixes are inexpensive tricks that play on your emotions and elicit a much higher price. Sellers may pay $2,000 for minimal upgrades or staging that you’ll end up paying $4,000 for. First-time buyers should look for a house they can add value to; this ensures a rise in equity. If you’re on a budget look for homes whose full potential has not yet been realized.

It’s true that you’ll probably have to make some compromises to be able to afford your first home, but don’t make a compromise that will be a major strain. Don’t get a two-bedroom home when you know you’re planning to have kids and will want at least three bedrooms. By the same measure, don’t buy a condo just because it’s cheaper when one of the main reasons you’re over apartment life is because you hate sharing walls with neighbors.

Before you close on the sale, you need to know what kind of shape the house is in.

You don’t want to get stuck with a money pit or unexpected repairs. Keep your feelings in check until you have a full picture of the home’s physical condition and the soundness of your potential investment. This will help you avoid making a serious financial mistake.

Agents are held to the ethical rule that they must act in the best interest of their clients, but if you’re a buyer, you’ll probably have a stronger advocate for your interests if you use you own agent not the seller’s.

It’s impossible to predict the future of your chosen neighborhood, but paying attention to the information that is available now can be helpful to avoid unpleasant surprises down the road.