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10 Mistakes First-Time Home Buyers Make

1. Not knowing how much house you can afford.

Many novice home buyers spend a lot of time researching homes – comparing kitchen layouts and backyard square footage – but very little time researching their financing options. One of the first things buyers should do is talk to a qualified lender and get preapproved for a home loan. Go to www.kitsapmomentum.com/elitegroup, for suggested lenders. Without first figuring out how much house you can afford, you risk falling in love with one you can't.

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2. Assuming foreclosures are great deals.

Just because the previous owner owed $450,000 on a house before the bank took it over doesn’t mean it’s worth that much now. Values have slipped significantly.  So you may not be getting the bargain you think with a foreclosure. Also, most homes owned by lenders or banks have been sitting vacant for months and may have been vandalized. That could require extensive renovation or repair. Weigh the costs of fixing up the property against the savings you’ll likely reap by buying a lower-priced foreclosed home. Lots of deals are non-foreclosed homes.

3. Letting your true feelings show.

No matter how much you've fallen in love with a house, don’t let the seller’s agent in on it. This is why you should ALWAYS hire a buyers agent, someone who works for you and you only. Otherwise, they will gain the upper hand in negotiations. Sellers Agents work for the SELLER!

4. Failing to find a good buyer's agent.

 Landing a mortgage is tough these days. So buyers should rely heavily on knowledgeable from us agents to help them get their finances in order. I'm not saying tell me, or any buyers agent all your personal business but listen to me when I advise you in putting together a budget and a plan.

 After all, buyer’s agents have a fiduciary responsibility to the buyer exclusively -- and should be looking out for their best interests. Start your search at the www.kitsapmomentum.com, where we specialize in the team approach not duel agency.  Interview the buyers agent, let them know what you want and who you are, don't be afraid to say whats on your mind. The greatest gift one can give is a referral to us, we pride ourselves in rolling out the red carpet for all our clients.

5. Underestimating the costs of owning a home.

Whether it’s a rusty pipe or a leaky roof, things go wrong and need to be fixed. Many home buyers don't anticipate the additional costs for repair and maintenance, or for an increase in utility costs, says Erin Baehr, CFP and president of Baehr Family Financial. Consider the age of your new home and how well it’s been treated by the previous owners in your budget. Be prepared to set aside a small percentage (1% at most) of the home’s purchase price annually for repairs and upkeep.

6. Failing to budget for property taxes.

Property taxes – and the likelihood that they’ll climb over the course of your time in the house – should be factored into any home-buying budget. To get an idea of how much you’ll be paying, call the local assessor’s office or talk to people in the neighborhood or ask your agent.

7. Assuming your first offer will get accepted.

As home prices get even more affordable, competition is bound to heat up. “You can’t assume you’ll walk in there, make the offer and get it. Try not to get discouraged if you lose out on the first – or second – house you make an offer on. We will keep moving forward until we find the perfect fit for you and your family.

8. Skipping the inspection.

DON'T skip the Home Inspection, hire a professional inspector. The seller isn’t likely to tell you there’s mold in the basement or the walls are poorly insulated. Lopatin advises buyers to find and hire their own inspector – independently of the realtor – to ensure there’s no conflict of interest and I could not agree more, we have a website set up which list three great inspectors www.kitsapmomentum.com/elitegroup.

9. Doing too much too fast.

Slow down and enjoy don't make the house your own right away. Don't overextend your  credit  and assume the improvement will pay for itself by increasing the home's value. But that’s not always the case – especially in today's market. Instead, buyers need to exhibit patience and make changes over time.

10. Failing to include a contingency clause in the contract.

A mortgage financing contingency clause protects you it, says, you lose your job and the loan falls through or the appraisal price comes in under the purchase price. Should one of these events occur, the buyer gets back the money he used to secure the property. Without the clause, he can lose that money and still be obligated to buy the house. Read your paperwork and do your homework along with me.

Joana Hoover

The Momentum Group

Helping buyers