Making mistake in real estate can be very costly. Keep in mind that you are investing thousands of your hard-earned money when you buy a house. When you commit mistakes, the effect can be brutal. It can cripple your financial resources for a long time.
Here are some common mistakes committed by first-time home buyers:
- Not sticking with the budget
As much as you want to get your “dream house”, don’t stretch your budget in choosing a home and for renovation. Once your loan is approved, check what your maximum loan limit is. Only shop for houses that the bank says you can afford not on what you think you can afford. Once you identify your budget, list all your monthly expenses such as rent, gas, groceries, credit cards, health insurance, among others. Make sure that these expenses plus your monthly mortgage payment can be covered by your income without any problem.
- Home shopping before mortgage approval
Getting too excited to find your first home is understandable. However, not waiting until you get approved for your mortgage is a cardinal sin in real estate. A loan is like a pre-requisite by most sellers. They will be looking for your loan approval letter as a proof of your financial capacity to pay them. You will be wasting your time and the seller’s time if you start looking for a house without getting pre-approved first.
- Missing-out the hidden cost
The price of the houses for sale in Washington DC is not the only expense that you need to be concerned about. You also need to factor-in overhead for paying property taxes, home insurance, and home repairs. If you are buying a condo, compute how much you need to pay for homeowner’s association fees, parking fee, and other maintenance fees.
- Letting the emotion get in the way
You want to buy the house that you’ve been dreaming of since you’re a kid. But the problem is that houses that are in stock are not 100% the house that you want. Some buyers don’t know how to compromise and they keep on chasing for what they really want. This is risky because you might miss out a good catch because you are still searching for your “dream house””.
- Not thinking about the future
If you will be moving into another state, do yourself a favor by not buying a house yet. Consider renting first if you don’t have any plan to stay in your house for long. Think about the purpose of owning a house and visualize what will happen to it ten years after.