How to Avoid Common First-Time Home Buyer Mistakes
Spring is arriving all across the country and along with the warmer temperatures and budding trees, the spring season also brings increased activity to the real estate market. New listings will surge and buyers will be out in force to search out and compete for the best deals.
But this type of competition can be challenging and buyers who make mistakes can wind up experiencing disappointment and setbacks, especially when their offer gets passed over for another. If you are preparing to purchase you first home this spring and want to bolster your chances of successfully purchasing the home of your dreams, avoiding these common mistakes is a great place to start.
Not Learning About the Buying Process Before Starting Your Search
A very common mistake made by first-time buyers is failing to learn how the real estate transaction works before starting to look for a home to purchase and this can lead to serious problems throughout the process. For instance, buyers who do not understand all parts of the process may find themselves scrambling to meet loan approval, inspection, or other contingencies or unknowingly setting unrealistic goals for closing the purchase.
To avoid this type of mistake, first-time buyers should consider asking their real estate professional to give them an overview of the real estate process and how it works in their particular area before beginning to shop for a home.This consultation should include reading and becoming familiar with the various forms and agreements most often used in local real estate transactions, including:
- the purchase agreement
- inspection notices
- closing statements
First-time buyers must also understand that the process doesn’t end the moment they make an offer and why counteroffers must be handled skillfully to avoid being pushed aside by a new, more attractive offer from a competing buyer. Discussing these scenarios with a qualified real estate professional will help buyers avoid problems and feel more confident about the entire home buying process.
Not Getting Loan Pre Approval Before Making an Offer
In the excitement of making a decision to purchase a home, first-time buyers often decide to start looking for one before securing pre approval for their mortgage or even saving up the full amount they will need for the down payment, closing costs, and other expenses related to buying a home. This can make it difficult, or even impossible, for buyers to know exactly how much house they can afford, how quickly they might be able to close, or even if they will be able to get a mortgage with terms they can afford. In addition, not having sufficient savings in place can doom a real estate purchase contract because some loans require this money to be sourced and seasoned for a period of 60-90 days prior to closing on the home in order to be approved for use in the purchase.
Since either of these situations can prevent buyers from being able to purchase the home of their dreams, it is better to avoid them by waiting to begin looking for a home until pre approval, not just pre qualification, is obtained from a reputable mortgage lender. In addition, buyers who have loan approval are more appealing to sellers who will likely prefer their offer over that of a buyer who is still arranging financing.
For even more information about purchasing a home for the first time, prospective buyers should make sure they are working with a real estate professional that they trust. Good communication between buyers and their agent is the first step in making sure that the entire home buying process is pleasant and successful.