Mistake number one: looking at homes without being pre-approved.
There is nothing worse than introducing a first-time buyer to the home of their dreams. It's supposed to be the most exciting time of their lives, you can see the stars in their eyes, they fall in love they want this house so so bad, and then they find out the bank won't give them the money. Now that is true and utter heartache. So make sure that your first step as a first-time buyer is to get a mortgage pre-approval - we can hook you up!
Number two: not having enough money in the bank.
You have to make sure you have enough money to close. At the end of the day, you don't want to get to the closing date and all of a sudden you have to pay the lawyer and you're broke. Usually, before you get your mortgage the bank will require that you have one and a half percent saved up for closing costs, so one and a half percent of the purchase price, so you need your down payment, you need money for things that are going to be out of pocket in the process, like your home inspection, and then you need that one and a half percent for closing costs. So make sure you have enough money in your bank on closing.
Third mistake: calling the agent whose name is on the sign in the front yard is going to be the one representing the seller. You want someone representing you, and the cost of having representation is nothing! So make sure to get your own representation. Choose a realtor, stick with that realtor and have that realtor represent you.
Number four: failing to understand the true cost of homeownership.
You want to have some extra cash available if something goes wrong. When you were a renter, the landlord looked after things like the leaky faucet or the leaky roof, now you will have to pay your mortgage, all your utilities, homeowners insurance, property taxes, and then you also have to fix things when they break. So make sure you have a little bit of extra cash set aside to look after those contingencies.
Number five: expecting to find a home that has 100 percent of the features you want.
Sometimes people let a perfectly good house go by because it didn't have a hundred percent of everything. Let me tell you it's almost unheard of to find a hundred percent of what you're looking for, maybe 75 percent if you're lucky. So you have to really look at your wants, what are your wants and what are your absolute needs? You don't need to compromise on the needs, however, if the needs are something like "I need a fenced yard", well that's something that can be added at a later date. If the otherwise perfect house comes along and it doesn't have a fenced yard but it has a big yard and it's perfectly fencible, then build a fence! Or if it doesn't have a swimming pool and you want a swimming pool that's something that can be added. Fireplaces, you can do updates to change kitchens, bathrooms, that sort of thing. You can even add a lot of sweat equity. There are also things that you can't change the school district (location-location-location), you can't easily change the size of the house probably. If you look at a house and you think "Oh I can easily just put an addition on!", well, think again. Additions are not easy, they're very expensive and they're usually not worth it, so our suggestion normally is to look for a different house that has the size, more along the size of what you need.
Number six: haggling in a seller's market.
If the market is super hot there's no point in trying to put in a low ball offer. There's literally no point, especially if you're in a multiple offer situation. In a seller's market, sellers are in the driver's seat. I would highly suggest watching our two videos about winning multiple offers, we'll put the links below and that'll give you a leg up, but one of the things is don't lowball!
Number seven: not trusting your hired agent to do their job.
Trust your agent to help you! One of the most difficult jobs as a Realtor is when first-time buyers have so much input from so many other people, from their parents, from their grandparents, from their friends-none of whom are realtors. Of course, it's a big decision and we understand that, however, I can't tell you how many times people have been talked out of a perfectly great house and into one that wasn't even close to right just because somebody else thought it was better, or maybe got into a house that was too expensive for their budget, or got into a house that was too little for what they needed, and then they end up selling in a year or two. It's a big decision but listen to your realtor's advice, especially on contractual matters. They do this all day every day.
Be sure to download our brochure about the "Seven mistakes first-time buyers make" here, and all the best of success in your first-time home buying journey!