Buying a home is an exciting event! But all that excitement can end up clouding your judgment. For most of us, our home will end up being the biggest investment that we’ll make in our lives. That’s why is so important that the choices you make in the home buying process are good ones. Our real estate broker in Germantown has worked with hundreds of clients over the years, helping steer them in the right direction and avoid those costly home buying mistakes. Here are some of the most common–and biggest–mistakes that home buyers make and how you can avoid them.
Avoid These Costly Mistakes When Buying a Home
Neglecting to make a budget.
Shopping for a new home before you know what you can afford is the quickest path to heartache. Inevitably, you will end up looking at a home that you fall in love with, only to discover that it’s out of your price range. That can make looking at homes you can afford to buy feel like a downgrade and create a frustrating experience.
What to do instead: Take time to create a budget about how much of a monthly payment you can afford to make and then use an online calculator to determine how much of a loan that’s going to get you. It’s a good idea to get preapproved for a loan, too. This can help move the buying process along a lot faster and give you a much more accurate idea of how much home you can afford before you start to shop.
Forgetting about additional costs.
Your mortgage payment is just one facet of the cost of homeownership. Many buyers, especially first-time buyers, neglect to take other expenses into account. Once they move into their new home, the expenses start to roll in and it can quickly put them in over their head. Things like mortgage insurance and house repairs can start to put a lot of pressure on the family budget.
What to do instead: Make sure you do your research about how much a home is really going to cost you on a monthly basis. If you are putting a lower deposit down on a home, find out if that means you’ll be paying mortgage insurance (which can run into hundreds of dollars a month). Also, consider home repairs and upgrades. A quick rule of thumb for this is that you can expect to spend 1% of your home’s value each year on repairs, although it may be more if you are buying a fixer-upper. Finally, don’t forget to factor in neighborhood or homeowners association fees.
Being inflexible on the wish list.
One of the fun parts of shopping for a new home is making your wish list. These are the must-have items that you want to find in your new place along with the deal breakers that you just can’t stand. Maybe you must have an open floor plan and can’t stand a small backyard. These lists are personalized to the needs and tastes of you and your family, and it’s fun to think about what you do (and don’t!) want in your new home. The issue becomes when these lists are miles long and completely inflexible; you could spend your life looking for a home that fits the bill and never find it.
What to do instead: Pick a couple of items that you want and a couple of items that you don’t want and leave it at that. Don’t be afraid to look at a home that are a little outside of your ideal wish list, either. Sometimes these homes are the ones that surprise you and end up being the home of your dreams! There is no harm in looking at something that you might not think is right for you at first; you are just looking, after all, and can always say no thanks.
Failing to consider resale value.
Most people look at homes with the idea that they are going to be living there for some time. The mistake comes in thinking that you are going to live there forever. Very, very few people live in the same home their entire lives. In fact, on average in the United States, most homeowners move after about 13 years. Failing to think about the resale value of your home even when you are first purchasing it could leave you in a financial bind later on.
What to do instead: Think about the resale value of your home a year from now, five years from now, and even ten years from now. Is the neighborhood going to be more in demand? Are there things you’ll be able to do to the home to increase its resale value? Thinking about that when you are buying the home will give you an advantage when it comes time to sell it again and help you get the most money out of your investment.
Not keeping emotions in check.
Buying a home is an emotional event that can be exciting, scary, exhilarating, and terrifying. Unfortunately, those emotions can start to cloud your judgment. You might end up falling in love with a property and be willing to pay any price the seller asks just so you can own it. Or you might walk away from a home because the thought of homeownership starts to scare you, even when it would be a great investment. Or maybe you love the property so much that you don’t care what the inspection report has to say, even though the repairs are going to cost you a lot of money down the road.
What to do instead: It’s easier said than done, but try to take the emotions out of it. This is where having a second opinion from a friend, parent, or real estate broker can help you see the truth of the situation.
We Can Help You Avoid Mistakes & Find the Right Home
Our real estate broker team in Germantown knows how hard finding the right home can be. We also know that it doesn’t have to be that way. If you are looking for a new home for yourself and your family, then you need to get in touch with us. You don’t pay anything for our Buyer VIP Program because the sellers always pay our fees. That means you can get five-star treatment at no cost to you and our team will help you avoid the painful and costly mistakes that others buyers commonly make. Get in touch with us today to learn more about how we can make buying your home a stress-free positive experience!