Buying a first home is a major financial transaction, usually the biggest transaction you will have ever been through in your life to that point. There are countless home buyer mistakes you can fall victim to, so keep a lookout for these common traps so you can stay on the up-and-up with your first home purchase.
Home Buyer Mistakes: Picking the Wrong Loan
The subprime mortgage crisis was caused by a lot of bankers selling loans to borrowers with adjustable rates. In these loans, borrowers were able to buy a home far more expensive than they could really afford thanks to an artificially low payment for the first few years. The loan would later adjust to a new, higher rate that put the homeowner into foreclosure.
Guidelines around this type of lending have become much more strict, but there are still predatory lenders out to make a buck on someone who does not fully understand what they are signing.
Stick with traditional 15-year or 30-year fixed mortgages with a rate that does not change for the life of the loan to avoid trouble.
Home Buyer Mistakes: Buying an Expensive Home
Everyone wants a dream home, but buying one at the cost of being “house poor” is a bad move. The perfect home is not perfect if it forces you to make big lifestyle changes with hobbies, vacation, and other parts of your financial life to scrape by and make the monthly payments.
Home Buyer Mistakes: Settling on the Wrong Home
Buying a home is not always as simple as it looks on TV. Most buyers have to visit far more than the three homes visited in shows like Fixer Upper and Property Virgins. Do not feel pressured to settle for a house that isn’t right for you. Keeping looking until you find a keeper.
If your agent pressures you to make an offer on a home that is not the right fit, it might be time to shop around for a better agent before you continue shopping for a home.
Home Buyer Mistakes: Getting the Most Expensive Home on the Block
Buying the least expensive home on the block and making upgrades is a sure fire method to reach real estate profits. Buying the most expensive home on the block does not give you much room to increase the value of your home.
When looking around your favorite neighborhoods, try to buy a home in the lower half of prices for the area. If you buy under the median and invest a little bit to fix up your property, you will be on track to sell for a nice profit when you’re ready to move.
Home Buyer Mistakes: Choosing the Wrong Agent
Nothing sets you up for real estate failure more than a low quality agent. Bad agents are a dime a dozen, which is why the team at Agent Harvest works hard to qualify and vet every agent listed on the site.
Don’t put your biggest purchase in the hands of someone who isn’t putting your best interest first. Work with a quality, trustworthy agent to help you find the perfect home at the right price.