TOP 7 Mistakes of First Time Home Buyers
#1 FOBO (Fear of a Better Deal)
Many Buyers just can’t take action . . . YES, they have dreamed about their first home, saved the requisite 5, 10 or even 20 percent down payment AND yet they cannot make a decision for FEAR their will be a better deal just around the corner.
If you are working with a Real Estate professional, their job is to use your TOP 10 List to assist you in Identifying the Best Possible Home for you in This Market – Because Homes are Selling Like Hot Potatoes!
#2 Making an Emotional Purchase
Did you know that Women . . . YES Women . . . INFLUENCE 83% of every buying decision. And, well, we can be emotional. So, keep that TOP 10 List handy.
- Is the home in the neighborhood in the home you want to be in
- Is it in the price range you can comfortably afford (you do not want to be house poor)
- Does the home have good bones and can it grow with you ? (It does not have to be your forever home)
#3 The Right Neighborhood
When I moved to South Florida 22 years ago, Weston was the place to live. People would wake up at 5 in the morning to bid on lots to build homes. The reality was, there were a lot of mosquitoes out there (I am like a beacon to them), the commute would have been horrendous for my husband who worked in downtown, and we both are beach people.
I wanted to purchase in Delray Beach because I loved the vibe and the older homes (it reminded me of Pasadena where we had just moved from), but again, the commute was too long for my husband.
After identifying 2-3 communities, we settled on Hillsboro Shores, a pocket community of about 250 that has private beach access, and it was the perfect move for us. We walked every street and we had to make concessions (older homes but no architectural details). It was a true community.
Once you and your Realtor identify the community you want to live in, really become familiar with it, and then learn all the streets, and get on the watch list for when homes become available in THAT Neighborhood.
Consider everything about your neighborhood
- If you have kids, are the schools close and the ones you want them to go to?
- Is the neighborhood walkable or close to a Library
- Does your neighborhood have a good ‘walking’ score . . . meaning is it easy to walk to cafes, local stores
- Is there a Local Green Market, outdoor entertainment, craft fairs
- Are the people friendly and diverse
- Is the age group good for you (let’s face it, if you have young kids and you are moving into a neighborhood where everyone has retired, it might be kind of quiet).
#4 Overspending
It’s a great market right now for both buyers . . . because interest rates are at historical lows. A 15 year mortgage was recently reported to be just 2.65%. And Sellers are getting between 95% and 97% of their asking price when their home is priced correctly.
The key here for first time buyers IS to take a hard look at your budget AND
- Have at least a 90 Day Emergency Fund (if not 6 months)
- A budget that allows you to still take vacations and make your mortgage payment
- A budget that allows you to remodel (because that’s the first thing most people want to do when buying a used home)
Make sure to do the INSPECTION and pay attention to it. Most contracts are AS IS these days, so if there were any items that need attention, be prepared for those.
#5 NOT SHOPPING FOR THE RIGHT MORTGAGE
A GOOD Realtor will refer you to two or three reputable Mortgage Bankers – take their advice and get pre-approved so all you will need to do is identify the property you are purchasing.
Having working in with Real Estate investors over 20 years now, I love the 15 year mortgage. It gives you the best rate and allows you to build equity quickly. I am partial to Supreme Lending. With all the changes in lending recently, they have been amazing. Dennis Hearing at Supreme is my go to person.
And, don’t think you need a perfect credit score . . . they assist people with mortgages with scores from 620 and above.
#6 DON’T BUY a Long-Term Project
That means unless you have a contractor as a relative or are one yourself, you have no idea what you are in for.
Someone may give you an estimate – however, having supervised several projects myself I can tell you, people lie – and unless you know what you are doing, you will get burned – don’t get burned on your First Home.
#7 BUDGETING
When looking at how much you can spend on your first time home, don’t forget your furnishings. Does your home come with appliances? If they are not listed in the contract, this can be negotiated. It’s a lot cheaper than going out and buying new. And, different parts of the country have different protocols.
Also, if you like the way a home is furnished, don’t be afraid to ask if you can purchase the furniture, many times it can be 50 cents on the dollar (or less).
Now, if you are just starting out and know you are going to need new furniture, be sure to include this in your overall budget when figuring out ‘how much home’ you can afford. Don’t we all love NEW stuff when we move.
My rule of thumb is if you purchase a $400,000 to $750,000 home, you better plan on $30,000 worth of furnishings to start.
Remember, when searching, keep your TOP 10 Must Haves handy as well as your pre-approved loan amount, and you will do great.
Happy House Hunting.
As a buyer you can depend upon Debbie to navigate you through the journey so you arrive at your Dream Home and truly ‘Love Where You Live.’ Her Buyers really appreciate her LOVE IT OR LEAVE IT Guarantee!
What does that mean? If you purchase a home from Debbie, and you don’t love it –she will sell it for you and not charge you a commission . . . She simply asks that you purchase your home from her that you will be moving to.
