Many home buyers who are pursuing their first home purchase will spend countless hours online researching all the available homes and neighborhoods in their desired market. They will attempt to learn more about all the available mortgage programs and options, and will try to determine what their reoccurring payments might look like on a monthly basis.
Homebuyers will generally go through great lengths try to educate themselves about a complex process that they are highly unfamiliar with. Despite the vast availability of real estate and mortgage information online, most first time home buyers often make the same common mistakes when they actually find the home that they want to give serious consideration.
By learning about these common mistakes, novice home buyer can take steps to prevent them, which will often result in a cheaper, faster, or easier overall homebuyer experience.
Not Focusing on All Costs of Home Ownership
Many first-time home buyers are overwhelmingly focused on setting up a mortgage payment that “meets” their budget. While this is important, the mortgage payment is not the only expense associated with home ownership. For example, there are property taxes, insurance, repair, water, sewer, electric and general maintenance expenses, just to name some. All of these expenses should be reviewed when considering what the total payment is as it relates to their overall expenses.
What might look like a cheap “fixer upper” initially, may end up being a more budget friendly home compared to a home that needs no immediate visual repairs now. Homebuyers should factor in funds needed for improvements and upgrades that they are not considering on day one or have not been exposed as of yet. They should factor that into their down payment considerations and carrying costs over the initial 12 to 24 months after homeownership.
As a first time home buyers it is highly unlikely that they will know what the true costs of homeownership is until they are living in the home for a reasonable time period.
Negotiating The Wrong Way With Sellers
When buyers do find that dream home, among the most important negotiation considerations for a first time home buyer to be aware of is that what may be just managing a budget to them is significantly more than that to the seller. “Sellers are emotionally vested in their homes, and take the entire home selling process very personally”, says Zeevyah Benoff, a top real estate agent with Links Residential Real Estate in Bergen County. Prior to becoming a Realtor, Benoff was a practicing Attorney and her legal background has helped add attentiveness to detail as she submits offers and counteroffers – being sensitive to the interests of all parties.
While many sales do get done via “For Sale By Owner” (a method where the sellers are not utilizing the services of a Real Estate agent, and try to sell their home alone), a significant majority of all sales in the US are predominantly done through a real estate agent, which exemplifies the importance of a knowledgeable and sensitive negotiation specialist. Presenting offers in the wrong way, can literally cost home buyers thousands or tens of thousands of dollars – or prevent them from obtaining the house altogether.
Not Getting a Proper Pre-Qualification
While for some it can be intimidating to get pre-qualified for a home mortgage, and for others the premise might be taken completely for granted if at all – prequalification are more important than ever . The pre-qualification process helps buyers learn about the maximum loan amounts, minimal down payments, and other financial determining factors to be considered when buying a home.
“Home Buyers need to think about short and long-term financial circumstances before they commit to a payment amount that suits their needs today”, says Shmuel Shayowitz, President of Approved Funding. The Real Estate market continually changes, and the economics and finances of individuals fluctuate constantly. “Homebuyers need to consider the fact that the payment they set now, will be in place until the home is sold or the loan is refinanced”, adds Shayowitz.
A proper prequalification and consultation before finding a home is more valuable than any other factor of consideration in this process.
While these are a few of the common factors for first time home buyers to pay attention to, working with knowledgeable and experienced professionals will be able to guide new homebuyers through any endeavor as they appear. With the help of true professionals, a home buyer can obtain valuable information that can help tem make a more informed decision when finding and negotiating their first home.
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