10 Mistakes First-Time Home Buyers Make

Smart Money lists ten mistakes first-time home buyers make as follows:

1. Not knowing how much house you can afford.
2. Assuming foreclosures are great deals.
3. Letting your true feelings show.
4. Failing to find a good buyer's agent.
5. Underestimating the costs of owning a home.
6. Failing to budget for property taxes.
7. Assuming your first offer will get accepted.
8. Skipping the inspection.
9. Doing too much too fast.
10. Failing to include a contingency clause in the contract.

Here's my take on each of these:

1. Don't let a bank tell you how much you should borrow. Figure out what you can afford (including your down payment) and get a home in that price range. Then again, others think you should buy more house than you need. I MAY agree with this -- as long as it's not more house than you can AFFORD.

2. Foreclosures can be good deals, but they also often come with a lot of baggage (like the homeowners trashing it before they left.) Just go in with your eyes wide open and expecting there to be "surprises" and you'll be prepared to potentially by a foreclosure.

3. Never let your true feelings show. To anyone (especially your agent.) We even tell our kids not to comment on the home when they go in with us. They can say whatever they want to to us once we're back in the car, but while we're in the house/with the agent, they aren't to comment good or bad on the place. One final note: if I like a place, I often comment to our agent how this or that is a problem that I don't like. Then, if we get to the buying stage, I can bring up the issue as a reason I'm not 100% sold on the place. (Yes, buying a house is a HUGE game, unfortunately.)

4. Having a bad agent can be a real drain on you in many ways -- physically, emotionally, financially, etc. Believe me, I know. Thankfully, there are ways to pick a good realtor.

5. There are all sorts of costs in buying a home. General maintenance goes without saying, but also consider the one-time costs of painting, carpeting, new furniture, etc. that you'll need to buy if you get a new home.

6. Real estate taxes go up, but hardly ever go down (at least much), even in this economy.

7. I've NEVER had the first offer accepted and I've never accepted the first offer as a seller.

8. You're going to buy something for a few hundred thousand dollars (most likely). Don't you think it's worth it to pay $400 to see if it's in good shape? Money well-spent IMO.

9. Goes along with #5. Not only do you need to budget for everything, but don't worry about doing it all within a month or two of moving in. We plan for a six to twelve month time period before we got fully settled.

10. Good thing we had a contingency clause in our most recent deal or we would have been stuck with a major problem.

There are two posts of mine that I think are especially helpful for someone thinking of buying a home. They are My Formula for Buying a House and What I Learned from Almost Buying a House. Check them out if you're interested in knowing more of my thoughts on purchasing a new home.

Comments

[Christina]

This is a great list!

I would add a few more:

11)Ignoring the neighborhood. Be sure to take a close look at how the neighbors take care of their property and notice any businesses that may be nearby.

12)Not planning for the future. Will the house be large enough for children? Will it be set up well for little kids? If something happened to my mobility, would I still be able to comfortably live in the house? I know so many people that only consider what they want/need right now, and don't even think about the house they may want in 5-1o years.

13) Failing to budget for home owner's insurance.

14) Failing to nail down the specifics of what is included. When we last moved, the buyer did not specify that he wanted the wall coverings... so we took them with us to our new house.... saved us a bunch, but cost them a lot extra. Be sure you know EXACTLY what appliances and fixtures are staying with the house so there won't be any surprises later!

[Christina]

oops!

14) should read window coverings... not wall... I think I'm sugar crashing after the holiday.

[MonkeyMonk]

To add to Christine's #11: Failing to heed the mantra of "Location, Location, Location." In my experiences of buying and selling real estate this is one of the most, if not the most, important factors to keep in mind when buying a house.

[Anne Pridescooter]

Error in buying --> is the result of letting the impulse do the talking. Your list is quite a great standard to follow.

[texashaze]

Don't fall for your agent saying "...another person has just made an offer on the house... you should be aggressive with a high bid". I've bought two houses. The first one I fell for it and when I bought my next house 4 years later a different agent said the same thing. That time I didn't fall for it and AMAZING, they accepted our low offer!