It's a buyer's market, no doubt about that. Inventory is up, sales prices are down and mortgages are more affordable than ever. However, that doesn't mean that the road to homeownership is completely free of potholes. There are still some very common mistakes that many homebuyers - especially first-time homebuyers - may find themselves making.
1. Judging a House By Its Cover
When choosing a new home you have to be willing to look beyond the surface. The market right now is filled with older homes and bank-owned properties that may not have been kept up well. It's easy to fall in love with some of these homes on first sight, but they may be hiding serious problems below the surface. It's always best to know about these problems ahead of time so you know what you're getting into and how much this new house might actually cost you in the long run. Don't skimp on the home inspections.
2. Location, Location and That Third Thing Too
Of course, the house itself is the most important factor when it comes to choosing a new home, but you should also take a close look at the location that you're moving into. How is the neighborhood? That house may not be worth it when you realize you'll have to deal with noisy (or nosy!) neighbors or a power-mad homeowner's association. It may not be worth it when realize that your new home comes complete with a long commute to the office, or even just to the grocery store. It may not be worth it if it's in an area of town where you're afraid to leave your car in the driveway at night because it might be stolen by the time you wake up in the morning.
The house itself is only a part of what you're purchasing. Make sure you really get to know the area before you buy into it. Drive the neighborhood at different times of day. Test out the commute to and from work a few times. Eat at one of the neighborhood restaurants. You want to be happy with every part of your new home.
3. Not Knowing What You Can Afford
Many buyers just don't do their homework before they start looking for a home. Some do a limited amount of homework, using websites and online calculators to determine what they think they can afford. But few do the real amount of homework that should be required. Calculators can give you some decent numbers some of the time, but they can't predict how a lender will react to your loan request. Most banks have tightened up their requirements in recent years, making it a bit trickier to qualify for a home loan. It's best to go straight to a lender or mortgage broker and ask them to help you determine exactly what you will be able to afford. Then, armed with those real and realistic numbers, you can begin your search for a new home.
4. Making Unrealistic Offers
Everyone's heard the stories by now - sellers are so desperate to sell their homes they'll gratefully take any ridiculous offer that is thrown their way! Obviously, that's an exaggeration, but many home buyers take this attitude when they start looking for homes. Even if a house has been on the market for months, giving the seller a severely low offer, or making unreasonable demands, will be more likely to insult them than to earn their gratitude. And nice homes in nice neighborhoods - especially those that have just come on the market - will still often get multiple offers. Don't try to unfairly take advantage of sellers in difficult positions, it has a good chance of backfiring on you. Stick to reasonable offers and you're still bound to find a good deal.
5. Skipping the Agent
Many buyers now think that because so many websites offer so much information on current listings, they no longer need an agent to help them find a house. Of course, that part may be true. With the prevalence of good internet searches, it is entirely possible to find the home you're looking for all by yourself. But what about the rest of the process? Handling the intricacies and irritations of financing, making offers, getting home inspections, setting up showings, dealing with seller's agents and every other important aspect of buying a home is usually far more than a buyer is able to handle on their own. Hiring an agent to act on your behalf helps to guarantee that everything gets done right the first time.
But don't just hire an agent based on a fancy website or a bus stop bench advertisement. Ask around to friends and family, go online and look up recommendations and testimonials. Find someone who is recommended by someone else you trust before you decide.
When buying a home, take your time and try to be smart about everything you do. With patience, determination and, hopefully, a little bit of professional advice, you'll do just fine.