Do you remember how it felt when you bought your first house? You were probably just as terrified as you were excited. For good reason. Buying a home is a big decision. It’s most likely one of the biggest purchases that you will ever make, unless you purchase another home in the future. It can be a stressful situation, and you want to make sure that you’re doing the right thing, and getting the best deal. But sometimes, emotions can overrule your head, or you just might not be as prepared as you should be.
Don’t Get Trapped
Whether you’re buying your first home or your third, there are some common traps that you should avoid. While these are common mistakes, they are easy to avoid once you know about them. So don’t worry. You’ll be able to make the right decision and be completely prepared before you buy your next (or first) home.
Get pre-approved for a mortgage
This is the biggest mistake and trap that any homebuyer can get caught in. Before you even start looking at houses, you need to get pre-approved for a mortgage. Mortgages require a lot of information and documents. If you do this before you even start looking at houses, you are one step ahead of the curve. Not only does pre-approval give you an edge when making an offer, it also lets you know what you can afford. Having a budget before you start looking for a house is a big deal. It lets your agent know what houses they can show you, and it gives you a good idea of what your payments will be. Plus, when you do find the house, the seller knows you already have financing. You don’t have to wait to see if you can even get a loan, which gives you an advantage when placing an offer.
Knowing what you need and what you want
After you’ve been pre-approved for a mortgage, don’t fall into this second trap. Be prepared when you start looking for a house. Know the difference between what you absolutely need and can’t live without, and what you want. You will have to compromise because there isn’t a single house that will be perfect (unless, perhaps, you build one). But, if you don’t have any idea of what you need in a house, like the amount of bathrooms, you could fall in love with a house that doesn’t actually work for you. You don’t want that to happen. You want to fall in love with a house that meets your needs and will let you grow into it.
Being on the same page
If you are buying a house with someone else, you have to work together. Don’t fall into the trap of being on completely different pages, or having one of you not involved in the process at all. You’re both going to live in the house, so you both need to love it. If you don’t work together, you’re just wasting your time and your agent’s time.
Get a home inspection
You might love the house, and to avoid a bidding war, you’ll forego the home inspection. Don’t do this. This is a huge trap, and it could have terrible consequences. Your offer needs to be contingent on a home inspection. This way, if the home inspection uncovers something major, you still have options. You can renegotiate for the seller to fix the issues, lower the price so you can do it yourself, or it gives you an out that legally allows you out of your offer.
Don’t wait on home insurance
This is something that’s easy to forget about, but it can be a big trap. If you don’t get home insurance, or the property is uninsurable for any reason, the lender won’t close your loan. Home insurance is as much for you as it is for the lender. You want to protect your home, and the lender wants to protect their investment. To avoid getting trapped or incurring any delays, get a home insurance binder long before you’ll be closing.
Timing the market
This can be a big trap. It’s impossible to try and time the market for the best prices and the best rates. Interest rates change every day, and home prices can be impacted by a number of things, foreseen or not. This shouldn’t be a consideration for buying a house at all. Instead, know what you can afford financially, and if it’s time for you to buy a home, and you can afford it, that’s what you should base your decision off of.