First Time Home Buyers’ Missteps
Wall Street Journal has published a quite accurate analysis of the most common missteps that first-time home buyers make.
Here they are:
1. Underestimating realtors
A lot of first time buyers don’t think they need a real estate agent. They believe all there is to a home purchase is finding the right home and with the massive amount of online listings info these days, they think they will be better off by themselves.
Managing offers, inspections, financing, huge amount of paperwork related to a home purchase, and all the other steps of home buying is what many new buyers do not realize they may need help with.
2. Guessing how much they can afford
Many buyers think they can figure out their finances themselves, as well. They use online calculators to estimate how much house they can afford and miss many factors which come into play like property tax and insurance, maintenance costs, moving fees, association dues, etc… Each home purchase process should really start with finding a good mortgage broker/banker to help with all that.
3. Falling for a “pretty” house
Often times, a house looks good on the outside and first time home buyers fall for it. But, deep care and thorough inspections are advised with any property before making final decisions. You may be surprised what you may find at a closer look…
4. Focusing on the house and forgetting the neighborhood
You can always fix up a house, but you won’t be able to change a bad neighborhood.
Spend as much time as you can in your future neighborhood, ideally on different days and times.
5. Making arbitrary offers
Yes, it is true that prices are low at the moment and in many markets there are more homes than buyers. However, it is a big mistake to assume that sellers will accept any offer and make unreasonable demands. Even in hard-hit markets, nice houses in desirable neighborhoods are getting multiple offers. “Deals” go within few days, often times at prices higher than they were listed at.
If the house has been on the market for more than three months, it should be fine to simply make an offer based on recent sales for comparable homes, foreclosure activity and market trends, and not be afraid to start the bidding low. If the house is new on the market (or recently foreclosed), chances are there are a lot of buyers are interested in it and the best strategy is to offer as much as you can and avoid a bidding war.
