Buying a home is likely to be one of the most expensive purchases you make in your lifetime. And for many people, the idea of buying a house can be quite scary, especially if you're a first-time home buyer. Figuring out what you can afford, how to find the right place, and how to make sure you aren't buying something that's going to end up causing you more stress than peace of mind can be quite an overwhelming experience. That's why we've put together a list of the most common mistakes that we see first-time home buyers make. 

1. Not having a REALTOR® guide you through the real estate transaction. 
   
   There are people that will tell you buyers don't need a real estate agent because all the do is unlock the door of the house and collect a commission after. But a good REALTOR® will do so much more to help you find the right home. 
   
   Here are a few things we do behind the scenes of each transaction for our buyers: 
   
   • Set you up on a search to find homes in your budget & review new properties to see homes that might work for you.
   • Do extensive research on properties that interest you to review pricing, learn about any updates or defects to the house, and learn any important information about the area that you may not know to ask about. 
   • Show you things about the home that do & don't line up with your ideal home. 
   • Attend the home inspection with you & help you understand the home inspector's report.
   • Negotiate all parts of the contract and contingencies.
   • Work closely with your lender to make sure you are making all deadlines & the purchase works for your budget & goals. 
   • Keep on top of all deadlines and make sure the transaction runs smoothly through closing.
   • Stay in touch with you after closing to make sure you have information for contractors as needed and to answer any questions you have about the home or home ownership.
     
     
2. Thinking you can't buy a home without a 20% down payment.
   
   While traditionally you could not purchase a home without a 20% down payment, there are many loan programs that allow you to put down less. Your mortgage company may require you to pay a PMI (Private Mortgage Insurance) which protects that lender if you stop making payments on your home. You can request that PMI be removed after you have reached 20 percent equity in your home. 
   
   
3. You don't have an accurate budget. 
   
   The best way to budget for a home is to sit down with a loan officer and review your finances. They can help you figure out your ideal monthly payment, remembering to include things like home insurance and monthly bills including utilities. Once you know what kind of payments you can afford, they can work with you to determine the type of loan you can afford and what the ultimate budget of your purchase will be. 
   
   
4. You don't shop around for different interest rates & loan programs. 
   
   When shopping for a large ticket purchase, you want to make sure you get the best bang for your buck and a home loan is no different. Talk to a few local lenders to see if they have any specialty programs that may help you as a first-time home buyer and learn what interest rates are available to you at different banks and loan officers. If you already have a REALTOR® that you're working with, they may have recommendations of different people you should reach out to. 
   
   
5. You write an offer without a pre-qualification letter. 
   
   Today, most people submit a pre-qualification with their offer so the Sellers know that the transaction is likely to proceed to closing without any financing issues. While a pre-qualification letter is not a guarantee that you will be approved for a mortgage, it shows that you have already taken steps to start the process and are a good candidate for a loan. 
   
   
6. You focus on your current needs and not how things might change in the future. 
   
   When buying a home, it's easy to think about what matters right now. But it's smart to think ahead as well. What life changes are you planning for in the next 5 years? Will you be adding more children to the family & needing more bedrooms and play space? Are you getting older & wanting less stairs to go up and down every day? Do you plan to bring elderly family members into the house to care for? 
   
   And don't forget that it's not just about the house. Do you know what to expect from your commute in the next few years? Where do you want your current or future children to attend school? If you have family members with health concerns, are you close enough to their doctors' offices and hospitals? 
   
   It can be overwhelming to sit down and put those thoughts down on paper. So, take some time to think about what things are most important to you and talk to your REALTOR® about how to address all of those needs. 
   
   
7. You decide to waive a home inspection to make your offer more appealing. 
   
   In a competitive market, it's easy to think "This house looks great. I'll skip the home inspection so my offer gets accepted." But even the best looking homes can hide hidden problems. 
   
   There are many ways to structure the home inspection contingency to make it more appealing to Sellers. You can offer a home inspection for informational purposes only or offer to only ask for repairs above a certain threshold. Talk to your REALTOR® to determine what makes the most sense for your home ownership goals. 
   
   
8. You open a new credit card to buy furniture or appliances for your new home, without talking to your loan officer first.
   
   When you are in the process of buying a home, any changes to your credit score can affect your loan. Before you make any large purchases or receive any large cash gifts from well-meaning family members, talk to your loan officer about how they might affect your home loan. You don't want to get to the closing table to find out the loan hasn't come through because the bank believes your financial situation has changed without warning. 

These are just a few of the mistakes that home buyers make when buying their first home but having an experienced REALTOR® on your side can make the process go more smoothly. 

If you have more questions about the process to buy a home or if you're ready to start the process for yourself, all New Leaf Team at 434.260.8980. We look forward to hearing from you.