If you’ve never bought a property before, the process can be intimidating. You might not know exactly what you want, and might be afraid you’ll end up with a property that loses value over time. There’s no way to gain property buying experience overnight, but you can better equip yourself for the process by familiarizing yourself with the mistakes that others have made in the past.
The Most Common Regrets of First-Time Homebuyers
These common regrets aren’t meant to intimidate you, but instead should illuminate some of the considerations often neglected by overeager homebuyers:
- Spending too much money. It’s natural to look at the biggest, most expensive houses you can afford when you’re considering a move. After all, this is the house where you’ll spend most of your time. You want it to be as luxurious as possible. However, if you buy the most expensive home you can get a loan for, you’ll likely regret it. An expensive mortgage will put an enormous burden on your monthly finances, and if you’re not careful, you could end up underwater—especially if the housing market dips after you buy. It’s much better to purchase a reasonably-priced home that fits squarely in your budget.
- Buying too quickly. If you’re eager to move to a new area, you may also be interested in making a quick decision—but this can come back to bite you. If you’re unfamiliar with the city and its surroundings, you may find yourself in a neighborhood that doesn’t fit your wants or needs, or you may not have ample time to see what other options are available in this neighborhood. This doesn’t mean that you have to look for a new house for months, but it does mean you should take this decision seriously, and evaluate lots of different houses before you commit.
- Buying for today. Another common regret is buying for the present (and the immediate future). Too many first-time homebuyers only think about what their current needs are, and completely neglect how those needs will change in the near future. For example, they may move into a new house because of a new job, without considering their job may require a move in the next few years, or may neglect the possibility of having children with their spouse or partner, buying too small a home to support a bigger family.
- Buying too far into the future. The opposite approach can also be a problem. If you plan on having children in the near future, it’s a good idea to buy a home that can support that number of people. But buying a house for five people when you’ve only recently found a partner can be a little excessive. The ideal approach is to strike a balance, thinking ahead only a few years at a time.
- Saving too little for a down payment. Consumers also frequently regret saving too little for a down payment. You can technically get a mortgage with just 5 percent of the purchase price, and in some cases, as little as 3 percent, but you may end up paying private mortgage insurance (PMI) and/or end up with a much higher monthly payment because of it. It’s typically better to save 20 percent or more before making a final purchase, though there are exceptions to this rule.
- Failing to organize wants and needs. If you go into buying a house with an “I’ll know it when I see it” attitude, you’ll likely end up regretting your purchase—or at least struggling with the decision-making process unnecessarily. Take some time before you start looking at houses to organize your wants and needs, and look at houses in various neighborhoods so you can make your decision faster and more thoroughly.
- Not working with an agent. Your buying agent is going to be your best friend during the home buying process. They’ll provide you with leads on homes that aren’t available anywhere else, and will give you a constant feed of expert advice you can use to make a smarter, more appropriate decision. Making the decision wholly on your own is a mistake unless you have lots of real estate buying experience.
- Not shopping around for a loan. It’s tempting to think that all mortgage are alike, but you may see very different rates and policies at different lending institutions. You’re doing yourself a disservice if you go with the first loan provider you come across; instead, shop around and see if you can get an interest rate just a few tenths of a percentage point lower.
- Skipping the inspection. Most homeowners who skip the home inspection process end up regretting it because there are inherent problems with every home on the market, and the inspection is your last chance to learn what those flaws are. It only costs a few hundred dollars and doesn’t take long, and it could alert you to problems that may take thousands of dollars to fix.
- Skipping the walkthrough. As a homebuyer, you’re granted the option of a final walkthrough before you sign all the paperwork for your home. Don’t assume that everything is as you expected it to be; take this opportunity to review what’s there, and take note of anything that’s out of place or unexpected. If you don’t do this, you’ll be stuck with any missing features or structural damage that arose between your initial inspection and the final paperwork.
Improving Your Knowledge
There are many ways to improve your knowledge about buying a home, so you can avoid these regrets. You can do more research, to learn what homebuyers before you have done and get more acquainted with your market. You can also talk to friends and family members who have bought homes in the past, and learn from their experience indirectly. However, the most effective strategy is to work with a home buying agent, so you can get the advice of someone who truly knows what they’re doing.
If you’re in the market for a Texas property and need some professional advice, contact Green Residential today! Our buying agents are some of the best in the area, and they’re here to answer all your burning questions about the home buying process.