Purchasing property for the first time is exciting, but it isn’t always straightforward. There are several steps between the beginning of the home hunt and closing day, and many potential challenges may arise along the way. Navigating the process smoothly can mean the difference between the ideal purchase and one that fails to meet your expectations. Fortunately, you can set yourself up for success by understanding the process—and the missteps that buyers frequently make.
If you’re new to the home hunt, here are five common mistakes you should avoid…
1) Forgoing pre-approval
Most buyers require mortgage financing before they can purchase a home. If you fall into this category, it’s in your best interest to get pre-approved before you dive into your search. During the pre-approval process, your lender will look at your current financial situation (including your credit history, your debt-to-income ratio, and more) to determine how much mortgage financing you’ll likely receive. They’ll then provide you with a pre-approval letter for this amount, which you can show to sellers in order to prove that you’re a serious buyer—one who has the means to make it to closing.
2) Not setting your criteria carefully
All too often, first-time buyers rush into the home hunt without assessing their needs. To ensure that you zero in on the right living space, create a detailed criterion. Think beyond the number of bedrooms and bathrooms you’ll need to consider the features, amenities, and neighbourhoods that will complement your lifestyle. Would your family prefer an open-concept layout, or the privacy of closed rooms? How far should you be from transit and local parks? While you may not find a home that meets every one of your criteria, a detailed list will help you choose one that’s as close to ideal as possible.
3) Purchasing a home you can’t afford
First-time buyers often wind up looking at homes outside of their price range. To avoid this common mistake, budget thoroughly. Start by determining your monthly take-home income, minus a generous amount for your necessary expenses—such as car payments, groceries, and utilities. From there, you can determine the monthly mortgage payments you’ll be able to comfortably afford. There are a few numbers you’ll need, including your interest rate (so ask a financial expert for help if you need it). Lastly, consider any new expenses you’ll take on with your purchase, such as property taxes and homeowner’s insurance.
4) Rushing into a decision
One of the biggest missteps that first-time buyers make is committing to a home before they know its entire backstory. There are all kinds of issues that can surface after you purchase a property, which is why doing your homework is crucial. To protect yourself, get a thorough inspection and ask any seller you’re hoping to buy from plenty of questions. An experienced agent can help during this process, and they’ll also know what to look out for in a home. At the end of the day, it’s about trusting your gut—and the guidance of a qualified professional.
5) Failing to see potential
Just as deciding on a property without doing sufficient research can lead to a less-than-optimal outcome, so too can being overly picky when it comes to small faults. Given that a home is likely one of the biggest purchases you’ll ever make, it’s understandable that you want to get it right. At the same time, small defects aren’t uncommon in a living space. In the long run, a few minor repairs or improvements may be worth the cost. You may also be able to get the seller to cover them during negotiations.
At the end of the day, buying your first home should be a positive experience that results in years (or a lifetime) of happiness. For this reason, it’s important to get started off on the right foot. Look for an agent who has a strong track record of success with first-time buyers. When it comes to the outcome you’ll achieve, it could make all the difference.
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