A good home-buying decision is one that fits your lifestyle and your budget-a house you’ll be able to resell when the time is right. Sound simple? Not always.
Five common mistakes frequently made by first-time buyers.
1. Looking outside your price range. To avoid disappointment, contact a real estate agent who can help you pre-qualify before you start looking for a home. The agent can also provide valuable insight on taxes and other expenses associated with a home (utility bills, etc.)
2. Buying on impulse. Buyers-especially first-timers-may be impressed by the first two or three homes they view. Look at a good selection. List the positives and negatives. Narrow the prospects to three or four, and then return for a closer look. Evaluate more than just the property. Look at the surrounding area and community amenities. Is this what you-and your family-want and need?
3. Not planning ahead. Think seriously about any personal changes you are planning in the next five to seven years.
For instance, if you are planning on having children, consider how the home will meet both your current and future needs. If a double-income is necessary to qualify for financing-and make your payments-do your plans foresee an income sufficient to continue making payments?
4. Failure to focus on location. Don’t just focus on the house, examine the neighborhood. Is the area safe, well maintained, moderately quiet and close to work, stores, and schools?
Find out about zoning and what new construction is planned on any vacant land in the immediate neighborhood.
Will the property be easy to market when you are prepared to sell it?
5. Failure to understand the home buying process. Once you select a home, get involved. Find a real estate agent willing to spend time with you, and don’t hesitate to ask questions. Have them explain the negotiation, financing and escrow processes and other elements involved in the transaction.
Home-buying involves knowing the price, and what is inside and around the property. Consider all your options carefully. This may be the most important financial transaction of your life.