(iStock)
Buying your first place is a big deal, and it involves a lot more than signing a contract. Here are five common mistakes made by first-time home buyers that can be easily avoided by taking the right precautions.
1. Not checking your credit beforehand
Get approved for a loan before you start looking at properties so you don't set unrealistic expectations and eventual disappointment, says Andrew Thorne, an agent at Coldwell Banker Residential Brokerage in San Diego.
When it comes time to apply for a mortgage loan, some first-time home buyers may find themselves scrambling to fix their credit, says Kim-Marie Mullin, an associate broker and the vice president of Better Homes and Gardens Real Estate Tech Valley. Damaged credit can in turn harm your credit score, which could negatively affect your mortgage payments.
Also avoid buying a large-ticket item (like a car) after you start the home purchasing process, Thorne says. Get your lender to help you repair your credit.
2. Forgoing a home inspection
Intense bidding wars may tempt some potential home buyers to skip the home inspection so that they can seal the deal, says Christian Dunn, of Cummings & Co. Realtors in Maryland.
"Possibly the most important part of the home buying transaction, certainly after the contract has been signed, is the home inspection," he says.
Another reason a home buyer may skip the inspection is to save some money, Mullin says.
"This may save them a few bucks in the short term, but what happens when they find out one month after the closing that their house in infested with termites?" she says. "It's just plain foolish not to have a professional come in and check everything from leaky faucets to radon levels."
Dunn stresses the importance of not only getting a home inspection, but of finding a good home inspector to do it for you. Speak with a few of the past clients of the inspector that your real estate agent recommends.
3. Enlist the wrong agent
Thorne says that using the seller's agent to represent the buyer is not a smart move for a potential home buyer.
"There is a conflict of interests when the buyer uses the seller's agent, whose primary goal it is to achieve the highest price for the property," he says.
4. Bargain-hunting
Mullin says potential home buyers who only want short sales and foreclosures because they are looking for a bargain are making a "big mistake."
"They don't realize that although it is priced well under market value, the amount of money that it would cost them to repair the damage could be staggering," she says. "Also, by focusing solely on short sales and foreclosures, they miss out on the real bargains."
5. Overlooking the neighborhood
Safety and crime rates are major concerns for home seekers, and, in a city like Baltimore, the quality of life can change in a matter of two or three blocks, Dunn says.
"It is better to give up the granite counters and a couple hundred of square feet and enjoy your neighbors and area amenities than it is to have a showcase home in a place that makes you feel anxious," he says.
Neighborhoods can have different characteristics at different times of the day, so make sure you visit a few times at various hours. If you are a light sleeper, you don't want to get stuck with a house in an area that comes alive with noise and activity at night.