First Time Home Buyers: Overcoming 5 Fears of New Home Buying

For most people, buying their first home is a dream come true. But for some people, there's something standing between them and that dream: fear.

Indeed, the fear of buying a home is very real and, for some would-be first time home buyers, it's enough to keep them from enjoying what should be one of the most exciting and rewarding transactions of their life.

As someone who specializes in helping first time home buyers find the perfect home that meets their needs, goals and budget, I understand this fear very well. And I also know that overcoming the fear is possible, provided that it's approached in a clear, logical and objective manner.

With notes from Amy Fontinelle's outstanding Investopedia.com article on this topic, here are the 5 biggest fears that keep prospective first time home buyers from achieving their dream.

Fear #1: Losing property value. Unlike a car, which can (at most) take hundreds or maybe thousands of dollars out of your pocket if resale values go down, a house is an altogether different story - the stakes are higher, and plummeting values can swipe away tens of thousands of dollars in a matter of months.

Remedy: First time home buyers should do their homework and get a strong sense of a potential neighbourhood before purchasing a house. What is the surrounding economic climate? What zoning or development plans have been filed? What about schools, malls, public transportation, and other things that boost a home's attractiveness when it hits the market? All of this homework helps paint a picture of whether a home is a good investment, or a risky one.

Fear #2: Expensive maintenance costs. Renters and people living with friends or parents may have "pitched in" on some maintenance costs from time to time, but home ownership takes this to another level.

Remedy: If potential maintenance costs keep you awake at night, then look for a house that is either well maintained, or has recently been upgraded. A home inspection is also essential. Taking classes on the basics of home repair can also be a very smart investment, and help put your mind at ease.

Fear #3: Buying the wrong house. If you buy tickets to a bad movie, the most you're out is a few bucks and a few hours. Even if you vacation in the wrong spot, the financial scars will heal in due course. However, because a home is such a significant asset, the fear of choosing the wrong one can be prohibitive.

Remedy: Have a clear plan of what kind of home you want, and don't deviate from that plan. A checklist is a great tool to help you focus on a house you need vs. a house you want. You can easily learn to love a house you need. But if the house you want doesn't meet your needs (i.e. if there isn't enough space, if it's not close enough to school, etc.) then you're likely going to regret the purchase.

Fear #4: Expensive mortgages. The US sub-prime meltdown has, understandably, freaked out a whole generation when it comes to mortgages. We've all heard stories (or perhaps know someone) who simply can't afford their mortgage, and either face foreclosure, or has had to prematurely sell assets merely to keep the home.

Remedy: The best advice here is to be very clear and careful on what you can afford, and not assume that your income is going to increase in an unrealistic fashion. An emergency fund in case of job loss is also a wise idea. Lastly, don't be lulled into accepting the maximum mortgage that your lender offers you. Get the minimum mortgage possible for the house you need.

Fear #5: Trapdoor Mortgages. This doesn't need much explanation. Just think of all of those sub prime mortgage holders in the US who locked in at an artificially low rate for a few years, and then found out that their payments doubled, tripled or more. No wonder this fear made the list!

Remedy: Don't get caught signing something you don't clearly understand. Talk to your realtor and mortgage broker, and understand the terms and conditions of any mortgage. Also ensure that you understand the penalties involved if you change your mortgage, and beware of "cash back" programs that require you to pay 100% of the cash you received if you move your mortgage to another lender.

Again, buying a first home should be a fun, exciting and positive experience. Unfortunately, the fears noted above prevent many first time home buyers from enjoying that experience.

However, with the right realtor - one who specializes in helping first time home buyers - and by approaching the home buying process in a clear, logical and objective manner, you'll smartly overcome these fears, and joyfully turn the key to your very first home!

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About the Author
My name is Chris Proctor, and I am a Realtor with Realty Executives - Devonshire Realty in Edmonton. I specialize in helping Edmonton home buyers find a great home that meets their needs, budget and goals. Search Edmonton MLS homes and condos here.