Buying a home is an exciting, daunting, and life-altering event. For first time home buyers, even more so. Not only is it a complex process, it’s likely the most expensive thing they’ve purchased up until that point.
While homes are generally a great investment, the potential pitfalls and mistakes that can trip up home buyers are many. Make sure that you get the most out of your abode, and avoid these mistakes that many first time buyers fall victim to.
- Buying If You’re Planning On Moving Again Soon
Some people feel like they just can’t justify paying landlords every month. Some people just get the bug to buy a home. Whatever the case, there have been far too many people who’ve purchased a home knowing that they were going to be moving again soon. While this isn’t necessarily the worst thing you can do, you have to understand that property taxes, closing costs, and depreciation of assets, you might end up losing money on the deal.
Remember that a home is a major purchase and long-term investment. Take your time figuring out where you want to settle for a while, and make sure you’ve got all of the right calculations on hand before purchasing — in fact, the next mistake to avoid is…
- Overspending, Poor Budget Planning, and Added/Hidden Costs
In finance author Matt Longhofer’s “5 Financial Tips for New Homeowners,” you’ll find that his top piece of advice is DON’T OVERSPEND.
“In the excitement of owning your first home, you will be tempted to buy the “perfect” furniture, or remodel certain areas to make them unique to you,” he writes. “Renovating and remodeling to a point that it jeopardizes your status as a homeowner because you aren’t able to make your payments on time just defeats the purpose of having your own home in the first place!”
You’ll also want to make sure that you’re not blowing through a budget that you set because you’re making emotional decisions and watching to many HGTV shows. That budget was set for a reason — and part of it was so that you can deal with added and hidden costs like HOA fees, maintenance fees, closing costs, etc. Just make sure to create and stick to a budget!
- Not Getting a Professional Building Inspection
While it may look like a dream house on the outside, it might be an absolute nightmare on the inside. Don’t skimp on getting a professional building inspection, which can often be covered by the seller. These handy folks can help you find hard-to-spot water damage, damage done by termites, and even gauge the air quality and flow of your HVAC (a common problem in older homes, according to the professionals at John Moore).
If you end up skipping an inspection and do buy a home with leaky pipes and cracked foundation, the value of your home could drop substantially. You don’t want that, especially when all it takes to avoid such a messy situation is a little planning.
- Unwillingness to Compromise
When looking for their home, some people just aren’t willing to compromise — which means they commit mistake number 2 and go over budget, or that they spend forever looking for a home without ever actually buying. A good way to deal with this is to create a want/need list when you begin looking for homes, and only list your “deal breakers” in the want column, things square footage or neighborhood you live in. The rest of the items–be ready to compromise. For example, instead of going all out and replacing the appliances in the kitchen, maybe look into getting a home warranty instead.
By avoiding these mistakes, first time buyers can make sure they’re getting the most bang for their buck, and making an investment they’ll be proud of for years to come.