It’s true—when you’re buying your first home, you don’t know what you don’t know. Maybe you’ve never heard of a home inspection or closing costs—or perhaps you have done some research about market value and you still have questions.
All of that is understandable. After all, real estate is a complicated area with countless scenarios, situations, and circumstances that make every home purchase unique. But you can count on Stoltzfus Realty to offer the guidance you need—starting here, with some valuable advice for first-time home buyers.
The Mistakes First-Time Homebuyers Make (and How to Get Ahead of Them)
You can’t be expected to know everything about the home-buying process—especially your first time around. But you can go into it armed with advice from experienced Realtors®.
Here are some common first-time home-buyer mistakes, and how to avoid them:
Failing to Get Pre-Approved for a Mortgage
Knowing what you can afford will tell your Realtor® what types of homes to show you. You don’t have to max out your available credit, but you will need to be pre-approved for a mortgage before your Realtor® will schedule showings—and absolutely before you make an offer. Contact your lending institution (or another of your choice) to start the process.
Not Comparing Interest Rates
Not every lender will offer the same interest rate. Make sure you’re getting the best deal so you can more easily afford the home you want. We suggest shopping around for two or three different options and considering FHA, USDA, VA, and Conventional loans.
Not Having a Downpayment
When you’re buying your first home, you won’t have funds from the sale of another home to fund your downpayment and closing costs. You can expect to pay up to 5% of a home’s purchase price in closing costs plus a minimum of 3.5% down. There are many factors that affect what you’ll pay, including the type of loan you qualify for and your credit score, but it’s rare that first-time buyers can purchase a home without money down.
Having a Poor Credit Score
It can be difficult to qualify for a mortgage (at a reasonable interest rate) if you don’t have good credit. Shoot for at least 600, but higher is always better.
Refusing to Compromise
Unless you’re building your home, the house you buy will likely come with some compromises involved. Maybe you wanted three bathrooms, but the best home in your area only has two. Maybe you didn’t want to make any improvements, but you’ve found an unbelievable deal for a home that needs upgrades. Make a list of things you absolutely will not compromise on. And have an open mind about the rest.
Submitting Offers on Homes You Don’t Really Want
When the market is hot, you may want to make an offer in order to “hold” a house. But remember that if that offer is accepted, you are A) obligated to purchase the home or B) subject to losing your earnest money deposit (a good-faith payment saying you fully intend to purchase if your offer is accepted). So, make sure you love that home before you make an offer.
Skipping the Home and Pest Inspections
When there’s a lot of competition for a home, you might feel like it’s a good idea to skip the inspections and buy the house as-is. This can be risky, however, since you could end up owning a house with major problems—and no way to recoup repair costs. With licensed inspections, you’ll also have the option of asking for repair costs as part of the settlement.
Not Working with a Buyer’s Agent
For some homebuyers, it can be tempting to tackle the buying process on their own. However, without a real estate agent to guide you, you might have difficulty scheduling showings, knowing about properties before they hit the market, finding comps, knowing what to offer, negotiating, filling out the required paperwork, finding problems with a home, and more. The number of things that can be missed by unrepresented homebuyers is mind-boggling.
Always Remember, You’re Not Alone
There are lots of things that can go wrong when buying your first home—but you can avoid those mistakes when you work with an experienced, motivated Realtor® like the ones at Stoltzfus Realty.
No matter if you’re thinking about buying your first home or your tenth in Lancaster County or surrounding areas (or even in Maryland), you never have to do it alone. Our team is here to answer your questions and guide you along every step of the journey to home ownership.
Get in touch with us today to get started. We can simply offer advice. Or, we can help you do everything from shopping for a home to moving in—and everything in between.