Buying your first home is an exciting milestone, but it can also be overwhelming. With so much to consider—finances, market conditions, negotiations—it’s easy to make mistakes that could cost you in the long run. To help you navigate the process, here are some of the most common first-time homebuyer mistakes and how to avoid them.
1. Not Getting Pre-Approved Before House Hunting
The Mistake:
Many buyers start shopping for homes without getting pre-approved for a mortgage. This can lead to falling in love with a home that’s out of your budget or missing out on a home to a more prepared buyer.
How to Avoid It:
Before you start browsing listings, talk to a lender and get pre-approved. This process will give you a clear picture of how much you can afford and show sellers you’re a serious buyer. It can also prevent surprises when it’s time to secure financing.
2. Underestimating the True Cost of Homeownership
The Mistake:
Many first-time buyers focus only on the mortgage payment and forget about additional costs like property taxes, homeowner’s insurance, HOA fees, and maintenance.
How to Avoid It:
Create a budget that includes all housing-related expenses, including utilities, repairs, and emergency funds. A good rule of thumb is to set aside 1-2% of the home’s value each year for maintenance costs.
3. Skipping the Home Inspection
The Mistake:
In competitive markets, some buyers waive inspections to make their offer more attractive. However, this can lead to unexpected repairs and costly issues down the road.
How to Avoid It:
Always get a professional home inspection.
An inspector will evaluate the property condition beyond what is visible to eye. If you’re in a competitive market and worried about losing the home, consider a pre-offer inspection or negotiating repairs during your option period rather than waiving the inspection altogether.
4. Making a Major Purchase Before Closing
The Mistake:
Lenders check your credit before closing, and making large purchases will affect your debt to income ratio this could ultimately lease to your approval being denied