Getting ready to buy your first house? Don’t make these rookie mistakes.
Mistake #1: Skipping Pre-ApprovalYou’re super excited about buying your first home. Do you:
A) Jump start the process by browsing online listings?
B) Talk to a mortgage lender about pre-approval?
If you’re serious about buying a home, your answer should be “B.” After all, shopping for a home before getting a loan preapproval is the equivalent of putting the cart before the horse.
Sure, this step isn’t as exciting as imagining fixtures and finishes, but pre-approval will give you a realistic understanding of what you can afford to spend, realtors can do a better job of finding your dream home if they know your budget, sellers will be more interested in accepting your offer, and overall, the process will be less stressful and time-consuming.
Mistake #2: Not Hiring a RealtorYou can buy just about anything online, that doesn’t mean you should. When it comes to buying your first home (one of the biggest decisions you’ll make in your life) it’s best to get help from a realtor. Looking online is a great way to prepare, but a realtor can:
• Decipher what “MLS for a 4B/2B with an EIK and a W/D” means and help you sort through the industry jargon.
• Help you navigate your way through the endless pile of forms, reports, disclosures, and technical documents without making costly mistakes or delaying the process.
• Find hidden gems, such as listings that aren’t actively advertised.
• Connect you to the best in the business including mortgage brokers, home inspectors, real estate attorneys, interior designers, and the list just goes on and on.
• Shield you from the competition, bidding wars, ruthless tactics, and all-cash offers. Believe me, negotiations can get downright brutal.
• Serve as an expert negotiator that helps seal the best deal and draw up a purchase agreement that ensures you have enough time for inspections and contingencies.
Mistake #3: Not Shopping Around for a MortgageYou probably shop around for the best prices on flights and laptops, so why wouldn’t you try to find the best mortgage rate and customer service? Not doing your research can cost you, yet almost half of first time home buyers avoid shopping for the most competitive offer. Do yourself a favor- submit applications to various lenders and brokers and see who comes back with the best rate. Also, empower yourself by doing your research. Find out what available interest rates are out there for people in similar situations (i.e. credit rating, income, etc.) and learn about different loan options (i.e. Is the loan fixed or adjustable? What is the difference between an FHA or VA loan?).
Additionally, many first time homebuyers make the mistake of thinking they have to go with the lender that provided them with their pre-approval letter. Not so! Shop around!
Mistake #4: Not Attending a Home InspectionOne of the biggest mistakes first time home buyers make is not attending the home inspection. An inspection will help you understand the universal condition of the house and can help you avoid purchasing a home that is in need of costly repairs. You should be involved in each step of the inspection including hiring your own vetted inspector, walking through the home with the inspector, doing your research so you know what to ask about the state of the home, and thoroughly reading through the inspection report.
Hiring an inspector will cost $300 to $700 and should approximately take tw0 to three hours. They will examine the condition of the following:
• heating system
• central air conditioning system
• interior plumbing
• electrical system
• attic and visible insulation
• the foundation
• structural components
Do not ask your realtor or a family member to do this for you. Take off work, cancel plans for happy hour, or go shoe shopping another time- you need to be there for this. Tag along with the inspector as he does his job- this will likely be your only opportunity to slowly and methodically view and consider the object of your investment. You need to know what costs you can expect in the future and what will need to be repaired or replaced. Buyers can use information from the inspection to renegotiate the sale to compensate for needed repairs.
On a side-note, know that home warranties usually do not cover the repair or replacement of things that failed the home inspection.
Mistake #5: Not Getting a Home WarrantyNot to be confused with home owners insurance, which covers major perils such as fires and water damage, a home warranty covers major components of the home such as plumbing and the electrical system. A home warranty provides homeowners with access to discounted repair, replacements, and service providers
You’ll want to ask for a home warranty during closing. In some instances, a seller will pay for the home warranty to move a sale forward. It won’t cover everything, but will help you down the road as things break down due to lack of maintenance and for things that may not have been found during the home inspection.
Contact Agent Lady today! Not only will she help you avoid these five mistakes, but will lead you through the home buying process to the right house and neighborhood. And remember, friends don’t let friends buy a home without Agent Lady!
About Agent Lady: Cherise Wynne is a leading real estate agent in Philadelphia, helping home buyers and sellers navigate the City of Brotherly Love, with a special focus on first time home buyers. To chat about getting started with your first time home buying experience, click here.