8 Costly Mistakes Home Buyers Make and How To Avoid Them

Are you dreaming of owning your own home? It's an exciting journey, but one that comes with its fair share of challenges. As you navigate the process of buying a home, you might find yourself facing unexpected obstacles that can derail your plans and cost you dearly.

In this blog post, we're going to uncover eight costly mistakes that many homebuyers make – and more importantly, we'll show you how to avoid them. Whether you're a first-time buyer or a seasoned pro, knowing these pitfalls and how to sidestep them can save you time, money, and a whole lot of stress.

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1. Not securing pre-approval before you start house hunting

We all daydream about our perfect home, but the last thing you'd want is to fall head over heels for a house that's beyond your budget. To avoid this heartache the first step is to get pre-approved for a mortgage. It's crucial to understand what you can realistically afford and what your monthly payments will be. A reliable mortgage broker can help you with this process. While banks might greenlight you for a higher amount, it's wise not to stretch yourself too thin. Stay practical about what fits your budget. Being pre-approved before making an offer on a house makes you a more formidable buyer.

2. Neglecting mortgage options

The process of obtaining mortgage quotes might feel time-consuming, requiring conversations with professionals and the submission of financial documents. In an attempt to speed up the process, you might be tempted to skip exploring the available mortgage options and hastily accept the initial loan offer that comes your way.

To secure the best mortgage option, it's crucial to start by shopping around. While your first quote may save time, it might not be the most cost-effective choice. Comparing different mortgage options is essential, as you could discover a lender offering a deal that saves you money throughout the loan's lifespan. Gather multiple quotes to pinpoint a lender providing a mortgage with favorable rates and terms.

3. Ignoring the latest market trends

Real estate markets are in a constant state of flux, and it's crucial for homebuyers to stay informed about the current conditions. Take the time to understand the present market trends to make informed decisions.

While property markets generally show stability compared to other investments, it's still wise to familiarize yourself with their current performance in your local area.

Having a good grasp of the current market climate will assist you in determining whether it's the right time to purchase a home or if waiting for a more favorable situation is a better option.

4. Focusing only on surface details during viewing

This can be a double-edged problem, and both aspects pose challenges. In the first scenario, you might come across a house with attractive finishes, fixtures, and decor. People often focus on these surface-level details and forget about aspects that can't be changed, such as the location, yard, or proximity to a busy road.

On the flip side, buyers might dismiss a home in need of paint and cosmetic updates but boasting strong structural elements and an excellent location. When searching for a house, be mindful of cosmetic features that can be easily changed, as well as issues that are costly or impossible to rectify.

To ensure you don't overlook crucial details, create a checklist for your property viewings. Here are some essential items to inspect:

• Check walls for dampness.
• Inspect window frames and look for signs of woodwork rot.
• Flush all toilets, noting any weak flushes indicating potential plumbing problems.
• Examine the roof from street level to identify any missing tiles.
• Inspect guttering for missing or broken sections.
• Test lights, switches, and other electrical components.

It's common for people to focus on superficial aspects like decoration and furniture, rather than addressing essential factors. During your viewings, prioritize a thorough examination of each property, especially if you're returning for a second look. This approach may reveal issues requiring further inspection by a professional surveyor.

5. Skipping the Home Inspection

A home inspection is crucial for preventing future issues in your new home. Some buyers might decide to skip inspections, especially in competitive seller's markets, but the safety they ensure is worth the investment.

Home inspections safeguard buyers and lenders from significant problems with the home's structure or essential systems. The inspection report highlights any existing or potential issues, giving you leverage to negotiate repairs or a reduced purchase price with the seller.

6. Overlooking the importance of offline searches

The internet has transformed the way we search for homes, providing convenience for homebuyers. However, relying solely on a few major property portals is a common mistake. Expanding your search beyond these platforms can uncover better opportunities. Consider using local newspapers and magazines, attending local real estate events, and leveraging word-of-mouth recommendations for a more comprehensive house-hunting experience.

7. Not saving up enough money

How much money do you need to save when buying your first home? Several expenses come into play, including:

1. Down payment: Traditionally, 20% of the home's purchase price was the standard down payment, but nowadays, it's less common. Some loans, like VA loans, require as little as 0% - 5% down.
2. Closing costs: These include appraisal fees, title fees, lender fees, application fees, loan origination fees, property taxes, mortgage insurance, and more. Generally, expect to pay about 3% to 6% of the home's purchase price in closing costs, on top of your down payment.
3. Homeowners insurance: This insurance is required by your mortgage lender and covers damage to your house and its contents. The cost can be found on your Closing Disclosure document.
4. Property taxes: Paid monthly, these fees are based on the assessed value of your property.
5. Home maintenance: Anticipate costs for routine maintenance and potential upgrades or improvements once you move in.
6. Moving costs: Don't overlook the time, effort, and money needed to move from your old home to the new one. Plan early and budget for professional movers if necessary.

8. Not using a Real Estate Agent

When searching for your ideal home, it's crucial to have a broker or a real estate agent by your side. These professionals follow ethical guidelines, ensuring they act in the best interests of both buyers and sellers. Going without an agent puts you at a disadvantage during negotiations.

In the selection process, scrutinize their qualifications to avoid partnering with the wrong agent. Seek a qualified and experienced professional with a substantial track record. These seasoned experts understand how to assist buyers in finding a home that aligns with their physical and financial requirements.

If your agent pressures you to exceed your budget, consider finding a different one.

Buying a home can be both exciting and stressful. There are many steps involved, and if you're not careful, you could make costly mistakes along the way.

But don't worry! Luxe Omni at eXp Realty is here to help. We want to make sure you have all the information you need and can answer any questions you may have. Our goal is to offer you the best advice possible so that you can move into your new home smoothly and without any hassle.