How to Avoid 1st Time Buyer Mistakes, Top 10

FIRST TIME BUYER'S TIPS

photo credit: Giulia Torra/Flickr

We've all heard that, "Buying your first home is like a roaller coaster." Yeah, but does it have to be that way for me? Now if I were in your shoes, I'd want to minimize the roller coaster. And, why can't my home buying process be more like Disney's "It's a small world" where the whole world is really small, people singing everywhere, and the ride is very, very smooth? Let's see if we can be more of a boat ride rather than a roller coaster by giving you the top 10 tips when buying a home for the first time.

Before we give you the "deets", let me first say that buying a home is probably going to be your largest investment. But the initial problem with most first timer buyers is that they don't do enought research. Sure, they'll study every home in their perfect zip code and site homes that sold 5 years ago (thank you Internet!), but ask them about what to expect during escrow, and they look like a deer in headlights. More than often, they'll just give me a blank stare about the word "ESCROW", but I digress. Bottom line, please understand what the process is like when we do go home shopping together, then be sure to bring your excitement, your homework, your documents, and then we can start singing "It's a small world" on our buyer tours.

Top Ten Mistakes to Avoid as a First Time Home Buyer

 

1. INSPECT, KICK-THE-TIRES, ASK A MILLION QUESTIONS: When we are in the middle of inspection period during escrow, please ask a lot of questions from your buyers agent (Jeff with Agent619 is the best, self-plug!). I do mean a of questions. Ask about roof leaks, ask about last termite inspection, ask if somebody passed away on the property, and ask some more questions after that. Then, when you've had enough, hire a licensed home inspector to draft a formal property inspection report. Then read that book, and ask more questions.

2. THIS HOME VERSUS YOUR HOME: If you've ever been in a model home, you know that the furnature is perfect for that home and of course you get excited about buying. Now, imagine if that same home is without the pefectly decorated fixtures and furniture. Would you like it then? Then add your own belongings and ask yourself if you still like the home? Don't be fooled by fancy staging and the smell of fresh flowers. Bring some reality into your prospective property and then decide if it's still a winner.

3. CHAMPAGNE TASTE ON A BEER BUDGET: We all want the best stuff. Now when it comes to our very first home, getting the most expensive home isn't always going to make us happy. Especially when we end up stressed out, overworked, and overwhelmed with a payment that seemed like we "could just afford it". Please please please work with a solid mortgage lender (I know some really good ones, BTW). Having a loan officer who will tell you the hard truth is well worth the risk of being initially denied, but only to comeback successful after a few financial tweaks. Budget for more than the total mortgage, and budget for some emergency money and you'll be fine.

4. RECRUIT THE ALL-STAR TEAM: I know some of us would be very proud to find a home and not involve a real estate agent. I get that. But at the same time, Agent619.com buyer agents are paid ZERO DOLLARS from their buyer-side clients. Sure they get a small finder's fee from the home that finally closes escrow, but why not use a buyers agent to help you navigate the home search, steer your through escrow, and answer your million+1 questions. Did I mention that we do this for FREE? Besides, they'll have a lot more resources and professional networks to ask favors from (loan officers, credit repair, lawyers, inspectors, handymen, etc.). It's part of being in-the-biz.

5. KNOW WHATCHA WANT: You'll save yourself a lot of time if you know where you want to live, how much you want to spend, and what home quirks make you happy. Then go shopping. Pretty basic right? You don't know how many buyer's I've met who said, "I want to buy a home, but don't know what I really want, untill I see it." Aaurgh! It's like going to the supermarket to get some food, but don't know what to eat, and you eventually end up sick as you've mixed all the junk food, dairy, sushi, and M&M's together in your quest for a meal. You really gotta know what you want before you go shopping.

6. HOW MUCH: So you decided to take the home ownership plunge, but the big question of, "How much is this gonna cost me?" must be answered. Most first-time homeowners don't realize that they're monthly payment is more than their mortgage payment. When doing your budgeting preparation for your very first home, factor in the following monthly payments: mortgage property taxes Melo Rose HO a private mortgage insurance and hazard insurance. Alma… What did you say? I understand that the mortgage is what I pay for the house but what in the world is all the other stuff? There is a common miss conception where people think that their mortgage is all they pay for the house, but in reality it's much much more as you can see. So please plan ahead and get into some he can afford knowing that this got me more than just the mortgage yesterday month to month.

7. LET'S TAKE A WALK: A couple days before we only close escrow the buyer and agents go back to the property performing final walk-through. Many times during the first time home buying experience a buyer will just disregard this process because are so excited taxi by the house out there and in escrow. This final walk-through really is not that big of a deal but it it is still very important. As a buyer, this is your chance to make sure that the home is in the same condition that you saw in when you wrote the offer. If the home is not in the same condition, broken windows dead plants holes in the wall missing appliances her MLS, etc. then we have an argument to support our case.

8. BUYER FLEXIBILITY: as a first-time homebuyer you should only buy what makes you happy. But the problem is many first-timers are too rigid with their home purchase pursuit. Meaning if it's not an ocean view cliffside home with a gold budday costing $75,000, then I am not buying it. Instead, plan to be 85% happy, because the perfect home, like Bigfoot, is just a myth. So who really cares if the wall is lime green but the room is super spacious? Just Buy the home, get some paint, and learn how to make your new home special, and eventually perfect.

9. PAPER IS THE GREAT COMMUNICATOR: During a transfer between the old seller and you (the happy and excited home owner), only believe what is on paper. It can be on official Department of Real Estate (DRE) forms or some kind of mutually signed agreement. Even if it's just a verbal agreement, take the time have both sides commit the agreement to paper. That way if all hell breaks loose and people start to sue each other, the judge can make an educated ruling instead of basing on "he said she said."

10. THE HUDDLE: With all the moving pieces, emotions running rampant, dollars moving in and out, and papers coming every day; make sure to keep talking and keep asking questions of your buyers agent (Jeff with Agent619 right?). Have a whole bunch internal talks with your all-star buyer's team and never keep anything secret. We are here to help you achieve your home ownership goal and we're really good at it when we have open communication, internally. So keep talking and keep asking questions.

 

Written by Jeffrey Luzadas on November 16, 2011 for the Agent619.com