7 Mistakes First Time Home Buyers Make
Buying your first home is an exciting milestone, and it's easy to get caught up in the thrill of house hunting. But before you start touring homes, it’s important to avoid some common mistakes that many first-time homebuyers make.
1. House Hunting Without Pre-Approval
It can be devastating to fall in love with a home only to find out later that it’s far beyond your budget. Getting pre-approved for a mortgage early in the process helps you understand how much you can borrow and keeps you focused on homes within your price range, saving you from unnecessary heartbreak.
2. Not Having Enough Money in the Bank
Buying a home comes with significant costs. If you deplete your savings for the down payment and closing costs, you might find yourself facing trouble when it comes time to get your loan approved. Lenders want to be sure you have enough money set aside to cover your mortgage and any unexpected expenses. Ideally, you should have at least $15,000 available for a $200,000 home purchase, but it’s always good to have extra savings to be on the safe side.
3. Calling the Number on the For Sale Sign
The agent whose name is on the “For Sale” sign represents the seller, not you. Their goal is to get the best price for the seller, not necessarily to get you the best deal. We always recommend hiring your own REALTOR® to help you navigate the process and negotiate on your behalf.
4. Underestimating the True Cost of Homeownership
Owning a home involves more than just your mortgage payment. You’ll also need to pay for utilities, homeowners insurance, property taxes, and repairs when things break. If you’ve always rented, this might be a new responsibility. Ask the seller for a one-year home warranty to cover repairs during your first year in the house. And be sure to set aside money for future maintenance.
5. Expecting to Find a Perfect Home
It’s rare to find a home that checks every single box on your wishlist. Aiming for 75% of what you want is a great start. For example, you might dream of a new house with a pool in a gated community for under $350,000—realistically, you may need to adjust your expectations. Maybe you’ll have to settle for a poolless home, or perhaps the house will need a little updating. Chat with your REALTOR® about what’s realistic in your price range and focus on the things you can’t change, like location or school district. Cosmetic upgrades, like painting the exterior, can always be done later.
6. Haggling in a Seller’s Market
If you’re shopping in a seller’s market—where homes are selling quickly and there’s lots of competition—don’t expect to get far with a lowball offer. Sellers hold the cards in these situations, so it’s better to approach them with terms that appeal to their needs. For example, they might want extra time in the home, or perhaps they’d prefer to close at a certain time of the month to avoid a double mortgage payment. Work with your REALTOR® to craft an offer that’s both appealing and fair.
7. Not Trusting Your REALTOR®’s Expertise
You hired a REALTOR® because they know the ins and outs of the home-buying process. Trust their advice and let them handle the negotiations. If you constantly second-guess their guidance or try to negotiate directly with the seller, you may unintentionally harm your chances of getting the best deal. Sellers can sense when you’re too eager, and it can weaken your negotiating power. Trust your agent to help you through the process—they’re there to make your homebuying experience as smooth and successful as possible.
Buying your first home is a big step, but with the right preparation and guidance, you’ll be well on your way to making your dream home a reality.
