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If you are thinking of becoming a homeowner, the prospect of making such a large investment may be exciting, while at the same time overwhelming. But it doesn’t have to be. Here are six common mistakes to avoid:
1. Not Understanding the Homebuying Process: Educate yourself. Do some research online to find out a bit about the local market. Find out some different things you'll have to do to prepare yourself for your purchase such as getting pre-approved by a mortgage professional, and finding a Realtor that will work for you. If you don't already know a Realtor, find on that you feel comfortable with so you know you can trust them to walk you through the homebuying process and answer all your questions.
2. Not Asking Questions: There are many facets and intricacies to the homebuying process. Although you may gain a basic knowledge on your own, you will still have questions for your Realtor. Make sure your Realtor knows that this is your first purchase so he or she can slowly walk you through the process and answer all the questions you will have along the way. Remember, this is one of the largest financial transactions of your life, so you want to have a clear understanding of what’s going on.
3. Buying on Impulse: Don't feel pressured into making an offer on the first home you see. 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 about each home. Narrow the prospects to three or four and then return for a closer look. When you decide to make a bid on a property, work with your Realtor to get all of your questions answered before making an offer. But don't wait too long to make an offer. The longer you wait, the greater the chance other prospective buyers may place offers, making it harder for you to negotiate a good deal.
4. Price Range: Before beginning your home search, consider getting pre-qualified to so get an idea of how much you may be able to borrow. Use this information as a starting point in determining your price range. Then take into consideration other factors that will affect your monthly budget once you are a homeowner, such as property taxes, homeowners insurance, utilities and maintenance.
5. Not Planning Ahead: Think about personal changes you are planning in the next five to seven years. For instance, are you starting a family, and if so, is the home large enough and will it continue to be? If this will be a starter home or if you think you’ll be relocating in a few year, you’ll probably want to pay closer attention to appreciation and resale value. If a double-income is necessary to qualify for financing and to make your payments, do your plans foresee an income sufficient to continue making payments?
6. Failure to Focus on Location: Don’t just focus on the house. Examine the community. Does it suit your lifestyle? Is the area safe, well-maintained, close to work, stores and schools? Find out about zoning and what new construction is planned on vacant land in the immediate area. Also consider the property marketability when it’s time to sell.
Above all, remember knowledge is key. No question is a silly question. Your Realtor can be an invaluable asset throughout the process. Making smart home buying decisions will make the home-buying process less scary and your first home purchase a rewarding experience.