When buying a house, one simple mistake can cause buyers to incur thousands in extra costs. Regardless of whether you're an experienced home shopper or you're a first-time buyer, the process doesn't get any shorter or less overwhelming. Being well-informed can prepare you for the long journey ahead and ease the process of buying a home. Here are eight common mistakes homebuyers make and how to avoid them:
Mistake #1: Focusing on Your Estimated Price Limit
The first mistake that many new homeowners make is focusing on their budget without knowing what it actually is. If you're only looking for homes within the price range you estimated, then you're not giving yourself the best chance of finding a property. A majority of people who make this mistake end up regretting it and wishing they had looked at their actual budget before beginning their home search.
Mistake #2: Not getting pre-approved before looking for houses
It's understandable! Browsing through listings and opening houses are the fun parts of house hunting. However, you'd be surprised by the sheer amount of buyers who meet with real estate agents and begin touring properties before they are even pre-approved for loans.
The fix is simple. Before you look at houses, it is in your best interest to determine the amount you are approved for so you can narrow down realistic neighborhoods and price points, establish yourself as a low-risk buyer, and maximize your time with an agent. This will go a long way in helping navigate the market and prevent you from falling in love with a house that is not within your budget.
Mistake #3: Not Knowing the Area Well Enough
One of the most common mistakes US buyers make is not researching the area well enough. If you're looking for property in a city where you don't live, it can be hard to do your research without spending hours online. And even if you are familiar with the city, there may be things about the property that you don't know about. For example, if the property is near a highway or busy street, then this could mean that there will be lots of noise and traffic. This can be very frustrating for people who enjoy peace when they come home from a long day at work.
If you want to avoid this mistake, we recommend researching properties by keeping the neighborhood in mind: what's nearby, what schools are nearby and how far it is from major landmarks or highways. This way you’ll avoid making a purchase based on inaccurate information, and also ensure that you end up with the type of house that you want!
Mistake #4: Buying Too Small or Too Big for Your Needs
One of the most common mistakes people make when looking for a property is buying too small or too big. For example, if you're single and making a decent income, you might be tempted to buy a large family home, which is probably not your best option at the time. Instead, it would be better to look for something more in line with your needs and budget. Similarly, if you're getting married and want to start a family, then buying something too small is not going to work against you.
If you’re thinking about purchasing a property but have been on the fence about the size of the house you should buy, you can consider these other factors:
Whether you intend to renovate or move your belongings into the property straight away, these are all important considerations to help you determine which size property would work best for your future needs.
Mistake #5: Not making an informed and competitive offer
Most buyers go into the house hunt with a mindset of negotiating the listing price. While a seller may accept an offer lower than the asking price, there's a time and a place for negotiations, and honestly? Now is not the best time. With mortgage rates hitting record lows this year, the influx of buyers in the market means houses are selling fast. In some markets, houses are being sold within 24-48 hours.
If you're interested in making an offer, you might want to consider putting in an offer that is competitive from the start. With so many buyers in the market, there are likely multiple offers for the house you are interested in - your offer needs to be strong enough to outbid other buyers. Be prepared to move quickly once your offer is submitted.
Mistake #6: Not Doing Enough Research About the HOA Fees
Many people don't realize that participating in a Homeowner Association (HOA) is almost compulsory. It means that you will have monthly or yearly fees to pay, which are often included in the mortgage. The HOA fees cover things like lawn and garden care and any upkeep.
Typically, the HOA fees are not too high, but they can be a burden if you're on a low income. If you are struggling financially, buying a house will be even more difficult. You should always research the HOA fees and talk to someone who has experience with them before signing on the dotted line.
Mistake #7: Forgetting to Get a Home Inspection Beforehand
To keep your options open and ensure that you buy a safe property, you should make sure to hire a professional home inspector before making an offer on any property.
Home inspectors can help you assess the property's condition, find potential problems with the home, and determine which repairs are necessary.
If there are major structural or mechanical issues with the house, you may be better off looking for another place to live.
Mistake #8: Letting your emotions influence your decisions
Don't buy the house just because you fall in love with its appearance - houses are staged to look appealing to buyers! Conversely, if you're browsing listings and the sellers haven't cleared out their things, remember that the house will be a blank slate for you. Don't get distracted by the clutter or cosmetic repairs. Make sure you're paying attention to the amenities and the layout of the house, not just the way it is currently decorated.
When you're initially going through the house, take into account the features and offerings of the property. Before closing, get a detailed home inspection to determine the health of the house. This report can help you to buy a structurally sound house with reliable electrical and plumbing systems. You want to take extra care to ensure that you are buying a house that meets all your needs; consider the surrounding neighborhood, the available yard space, and the condition of the property.
Final Thought
There are so many factors that need to be considered when buying a house. In a market where houses are sold within days, buyers need to be informed and prepared to quickly make big decisions to make their home-owning dreams a reality. The more prepared you are, the more likely you avoid making common mistakes. Remember - when in doubt, consult with your real estate agent! Find your agent with SetSchedule here.
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