8 Common Home Buyer Mistakes and How to Avoid Them
Only 7% of buyers choose to purchase a home directly from the owner. This is because purchasing a home directly from the owner is a home buyer mistake. You won’t always get the best price buying straight from the source.
As a home buyer, you are probably wondering what other home buyer mistakes you need to avoid. Read on to find out.
Home Buying Mistakes
Buying a House You Can’t Afford
One of the most common home buyer mistakes is buying a house you can’t afford. Some people may question how this is an issue because it is an obvious red flag. However, it does happen quite often.
Even if you think you have found your dream home, you shouldn’t spend more than you can afford. Taking out a bigger mortgage is not a great idea for home buyers. There are fair house prices out there to choose from to prevent you from making this mistake.
Taking out a bigger mortgage can become a problem when you have to pay your other bills. Your financial budget will be affected immediately and you may struggle to pay other necessary bills.
Find out how much you can afford to spend on a home and stick to that number. As a general rule, a house payment should not exceed 25% of your income. This includes interest, principal, homeowner’s insurance, property taxes, and the options for mortgages.
Not Having Enough for a Down Payment
Not having enough money saved up for a down payment is another one of the home buyer mistakes you don’t want to make. Your down payment should be more than 10%.
Although you can buy a home in some areas for a small down payment, this is not always the best idea. Because your down payment is so low, you will be paying more in interest and other fees.
You should aim to save as much as possible for the down payment. Trying to save up to 20% of the total price of the home is a good recommendation.
Forgetting About Other Expenses
You need to save enough for your down payment, but don’t forget about other expenses that will come up. Other fees you need to consider are the closing costs and moving costs.
The closing costs often include home inspection fees, property taxes, appraisal fees, and insurance fees. This can cost you up to 4% of their home value.
Moving fees can get pretty pricey so it is important to add it to your budget. Plan for these expenses so you don’t have to take money out of another budget you will need later on.
Getting the Wrong Mortgage
Because there are different options for mortgages, one of the most common home buyer mistakes is getting the wrong one. Most options will get you into a home whether you have a high credit score or not.
Don’t take the first option you find. You should sit down and add up all of the expenses so you are not paying thousands in other fees. Choosing the wrong mortgage could leave you in debt for years to come.
Stay conservative when it comes to choosing a mortgage. Go with the option you can afford and that will save you money in fees.
Not Using a Real Estate Agent
An experienced agent is an effective part of the home buying process. Real estate agents will be able to help you more than real estate apps or websites.
An agent will help you understand what homes are in your price range and on the market. They will also be able to find home listings that have important information about the property.
Those who search for their homes online without the help of an agent don’t have a leg up. By using a real estate agent, you will beat those buyers who shop online. Once they have found the perfect option for you, they will be able to negotiate a better price.
Maybe your dream location is in Hawaii but you don’t know where to start looking for a home. A real estate agent can help you find your perfect match. You can read more here about buying a home in Hawaii.
Focusing on Style
A house that needs a paint job shouldn’t be overlooked. There are always simple indoor and outdoor renovations you can make to get the house how you want it. Try to get passed any odd landscaping, bad carpeting, etc.
Look for a house with the mindset that certain things can be easily replaced. When searching, keep things that cannot be fixed as easy in mind. For example, focus more on the structure of the home rather than the style.
Buying Before an Inspection
A home inspection is the best way to check the structure of the home. Sometimes it is difficult to tell whether the roof or plumbing system is old when you are searching for a home.
Always get a home inspecting before buying the home. It may cost a little extra, but it will be worth it in the long run if you do run into any issues.
A general inspection will include reviewing structural elements such as the HVAC system, electrical, and plumbing systems. After the report is given, you can decide to buy the home as it is or try to decrease the buyer amount because of problems.
Forgetting About Insurance
The wrong insurance policy could leave you running into future problems. Title insurance is important, but homeowner’s insurance is especially important. This insurance will cover your home for things like natural disasters.
In any instance, you want insurance that can cover your items and still give enough to rebuild your home if necessary. After finding the right insurance policy for your home, be sure to check the amount each year.
Home Buyer Mistakes Explained
Buying a home is not easy, but it doesn’t have to be so hard either. There are ways to decrease your stress and make your home buying experience as easy as possible. If you are mindful of these eight home buyer mistakes, you won’t accidentally make them when looking for a home.
The next article you read could teach you more so don’t forget to keep coming back for articles like this!