Are you buying a home for the first time? As a real estate agent in the Greater Indianapolis area, I understand how confusing the process can be. From making sure you find a home that suits your budget to conducting inspections and negotiating repairs, there’s a lot that needs to be done. First time home buyers can lose out if they don’t understand how the real estate market works and what the current trends are. For most people, a home is a one-time investment, so it becomes even more important that you avoid as many mistakes as possible. To help you out, I have prepared a list of the most common first time home buyer mistakes.
Let’s take a look at what these are.
1. Not Knowing When To Negotiate
Suppose you have your eyes set on a home that has everything you are looking for. However, the price is a little steep. You might still go in thinking you can negotiate with the seller. Negotiation is an essential part of buying a home. However, it may not always be on the table. Every seller uses different tactics when pricing their home. In some cases, they may leave some room for negotiating. In others, they may not.
You can ask the seller upfront if they are willing to bring the price down a little. You can also throw in other incentives, such as offering to pay for repairs (if you can afford it). However, if the seller declines your offer, it’s best not to stick around. Chances are, they have multiple buyers willing to offer a higher price, and you are just wasting your time.
2. Going Above Your Budget
This is one of the most common first time home buyer mistakes people make. You don’t want to end up spending too much on a home. Even if a house looks promising, you need to consider your mortgage and your personal finances before signing on the dotted line. Consider the bigger picture here and make a decision that ensures your financial security in the long-term.
3. Not Carrying Out a Thorough Inspection
Some homes are so stunning that you forgo additional checks. However, first appearances can be deceiving. Regardless of how beautiful a home appears on your first tour, make sure you hire an inspection company to look into every detail. Failing to do this can cost you immensely in the long run.
4. Not Making a Larger Down Payment
Most people stick to paying 10% to 15%, which is among the most common first time home buyer mistakes. If you are applying for a mortgage, try and submit as high a down payment as possible. U.S Bank recommends putting down at least 20% of the home purchase price as a down payment. Of course, this depends on what you can afford, but a higher down payment can pay off in the long run. You get to enjoy a lower interest rate and better repayment terms, which can lower your cost of borrowing. In addition, you can generally avoid paying a monthly Private Mortgage Insurance premium, if you can submit a down payment of at least 20%.
5. Failing to Prioritize the Things That Matter
It can be hard to find the perfect home. However, that doesn’t mean you should settle for a substandard residential property that doesn’t reflect what you want. You will have to compromise on a few things, but make sure that the property you choose has some essential qualities that you are looking for. You can prepare a list of must-haves and use this to make a decision.
Wrapping It Up
Buying a home is an important milestone in your life, and you must avoid any first time home buyer mistakes wherever possible. Hiring a real estate agent can be a big help here. If you are looking to buy a home in the Greater Indianapolis area, please feel free to reach out to me for assistance.