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Top 10 Mistakes 1st Time Buyers Make & How To Avoid Them

Courtesy Diana Evans

“I wish I knew then what I know now.”

From start to finish there are a whole host of pitfalls that 1st time buyers can fall into. Knowing what they are before embarking on the first “deal” can make the whole process easier and much less stressful.

Not knowing what mortgage options are available.

Choosing the right or wrong mortgage can save or cost a buyer thousands of Dollars.Use an experienced mortgage broker that has been recommended and you feel comfortable working with. Your local bank will only promote that banks mortgages; a decent broker has access to a whole range of products.

Not getting a pre-approval for a mortgage.

What can you afford? Knowing this before any viewings can save a great deal of time and stress. A buyer can also be very confident when making an offer and negotiating as there is a definite ceiling on an offer.

Not understanding all the costs of home ownership.

A very common mistake; buying more than you can afford. Not only is their the actual cost of the property  but also home inspection costs, closing costs, moving day costs etc. Add in the day to day running cots of a home and other personal commitments and the money can run out.

Letting Your Heart Rule Your Head.

Most people buy a property with emotion and then justify it with logic. This is especially true of the inexperienced 1st time buyer. However you may end up buying the wrong house OR paying too much for it if common sense is not used. Although an exciting time try to be as objective as possible and not overstretch your bank account.

Not choosing the right location.

Location, location, location.It is very difficult to think bout reselling when you are only just purchasing your first house. But you will want to sell it, most probably between 5 and 7 years later. Think about what affects a resale: closeness to schools, shops, transportation, parks, other planned developments ( a proposed highway at the bottom of the backyard is a big no no) and even local crime statistics.

Rushing In

With the desire to own a property it is very easy to “settle” for a house which is not the best option. Research and double check finances, the area, your own wants and needs so as to make the best choice possible.

Not paying for a home inspection.

This is especially true if a buyer is overstretching and trying to save some money on the initial costs. Usually less than $500, a home inspection can save $1000′s. Even if the seller has a pre-listing inspection, for peace of mind it is worth paying your own expert.

Not understanding the “Agreement of Purchase and Sale.”

There is no such thing as a stupid question when such a large amount of money is involved. Ask the realtor and your lawyer to explain anything you are unclear about. Remember the agreement isa legally binding contract. Special attention needs to be paid to the non pre printed sections that are unique to your deal: closing date, cost,inclusions and exclusions, conditions and waranties.

Not viewing enough homes.

It is very easy to “fall in love” with the first property viewed and it may end up being the “right” one. But comparing several properties will ensure the correct choice is made. A decent realtor should happily organise for you to see several homes and arrange 2nd and 3rd viewings as the choices are narrowed down. Equally the realtor should provide information on local market values so a first time buyer doesn’t overpay . It is then easier to make an informed decision based on facts not emotions.

Not using the right Realtor

Find a realtor who you feel comfortable working with AND one that listens to your requirements. One that is happy to spend time, answer all questions and is not driven by the commission cheque.

This entry was posted on Saturday, May 2nd, 2009 at 7:53 pm and is filed under The World Of Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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