Gaining a foothold in the real estate market can be a daunting endeavor. Home-buying is unlike other sales and purchases. There are many things to consider before taking the plunge and a variety of mistakes that can bring you headaches and financial difficulties.
One has to go through a slew of decisions and reach the destination with keys to a dream home. It neither sounds easy nor plays out smoothly in practice. But, don’t sabotage your own dreams by succumbing to pressure and stress. Many have been where you are now and shared their valuable insights.
Not getting pre-approved for mortgage
Financing the purchase yourself is probably not an option. Most first-time buyers rely on mortgages to fulfill their goals. And to make it happen, they seek a trusted lender in order to get pre-approved (not to be confused with getting pre-qualified) as soon as possible.
Looking for homes that are beyond your means wastes a lot of time and leaves you emotionally drained. So, buckle up and prepare for having your financial background and credit score checked. Take necessary steps to get your financial house in order before that happens.
Failing to grasp all expenses
It goes without saying that you should not buy what you cannot afford. But, the problem is that many newcomers to the world of real estate transactions tend to lose sight of all the expenditures, including additional and hidden ones.
Namely, apart from the price tag on the property, you have to factor in taxes, utilities, costs of living in the new area, maintenance, repairs, insurance, monthly mortgage payments, etc. Only once you have a total figure can you figure out whether the new home is a realistic target in the first place.
Getting emotional
This is to say that you cannot let emotions run the show. In fact, you are much better making informed and rational decisions than taking a wild ride on an emotional rollercoaster. Feelings can cloud your judgment and make you overpay for a home.
So, set them aside. Keep your budget in mind and avoid getting caught in a bidding war. You could use a reality check and make peace with the fact that there is hardly such a thing as a perfect home. What is more, separate nice-to-haves from must-haves: the latter are your guiding light during the home hunting mission.
Doing everything yourself
Going DIY might seem like a nice strategy to keep spending in check, but think twice before committing. Most mistakes occur due to the lack of experience and knowledge, things that real estate agents have loads of. They can run you through the steps you need to take to become a proud homeowner.
Moreover, agents effectively handle many crucial processes such as finding listings and obtaining necessary information and documents. Also, it pays off to have an agent by your side when working out a negotiating position and considering the seller’s offer.
Having no clue what’s happening in the market
Just like any type of market, real estate landscape is governed by laws of supply and demand. Housing affordability is a key aspect, which is influenced by median income, economic development, assist and support schemes, and other factors. Affordability fluctuations are common and they have the greatest impact on first-time buyers.
For example, quality new homes in Sydney pop up every now and then and they come in all shapes and sizes. A high volume and range of supply have a flipside, though—increasing prices. Sydney has the largest and most expensive housing market in Australia, although periods of price cooling off (which is the case right now) make it easier for buyers to make the purchase.
Overlooking the inspection
A home inspection is the key stage of any real estate transaction. It is when you get a chance to look things up-close and ensure you are getting real value for your money. The professional inspection is the best way to uncover faults and defects that could act as red flags and deal-breakers, such as structural problems and leaky pipes.
Short of these issues, you can make an offer and have a peace of mind. Therefore, don’t trust pictures you find online. Like it or not, to maximize your chances of success, you have to visit as many homes as possible yourself. Besides, in some states, inspection is even a contract contingency.
Get the first crack at homeownership
First-time home buying is like a minefield where every misstep could wreak havoc on your aspirations. To find your way through it as right as rain, get familiar with every step of the home buying road. Some general rules apply regardless of the specifics that stem from local and state ecosystems.
In any event, don’t act on a gut feeling. Come up with a solid plan and get your priorities in order. Hire an agent and meet all the legal and financial requirements before making a call. Use a presented list of common blunders to navigate the labyrinth of the decision-making process.