Top 10 First Time Home Buyer Mistakes

1.Not having a budget. First time home buyers really (really) need to know how much they can spend. It's easy to fall in love with a potential home and "talk yourself into" buying more than you can afford.

2. Not getting mortgage pre-approval. Excited first time home buyers often overlook just how important it is, especially when negotiating with sellers, to be pre-approved for a mortgage. This also gives buyers a chance to fix any dings on their credit rating before they lock into a mortgage rate.

3. Overlooking monthly expenses. Nothing causes the "new home blues" more than realizing that there are monthly expenses to take care of - things that, in the past, landlords or parents took care of (like taxes, maintenance, repairs, all utilities, and so on).

4. Nit-picking. You've heard the saying "it's like being a kid in a toy store"? Well, for first time home buyers, the market can seem like a giant toy store - but for grown-ups! This is fun, but it can quickly turn into misery if buyers become too choosy. Remember: each month you spend looking for a home is another month you're paying rent (and paying your landlord's mortgage...instead of your own).

5. Locking into WYSIWYG. There's always a chance that you won't instantly love the design choices of a potential new home - the wallpaper, the garden, and other elements. That's fine. All you need to do is envision (and of course, factor in any costs) of transforming these disliked aspects into what you want after you purchase the home. Things like wallpaper and flowers in the garden are relatively easy and inexpensive to change. Don't get locked into WYSISYG ("what you see is what you get") tunnel-vision.

6. Getting emotionally "caught." Sellers want to maximize the value of their home - and that includes both the real value and the perceived value. And one of the ways they attempt to do the latter is through cosmetic upgrades, which can have a "wow!" effect on buyers. I mean, who doesn't like a bright and freshly-painted home, a manicured front lawn, or new all-season gutters? It's fine to appreciate these cosmetic upgrades, but just make sure you don't get caught into offering a higher price, or buying a home you truly can't afford, because you were wow'd.

7. Needless compromise. Earlier, it was noted that being too picky is a mistake - but so is needlessly compromising with a house that doesn't have the functionality and features that you need. So if you plan on starting a family, think ahead and picture how much space you'll need. Or if the idea of yard work gives you nightmares, then don't compromise and get a home with a huge lawn. It's hard to stay focused - but the rewards are well worth it. Be flexible, but don't compromise.

8. Forgetting to inspect. A well-staged home can look perfect, but there can always be some "cracks in the armour" when it comes to future maintenance and even safety issues. As nice and shiny as everything seems in a potential new home, always make sure you hire a credible home inspector. The minimal expense (it's usually a few hundreds dollars) is tiny compared to the overall value of the home, or any future repairs that you may be forced to make.

9. Dealing with the seller's agent. You're checking out a potential new home at an Open House, everything looks great, the price "seems" right and so on - and then you decide to save money by dealing with the seller's agent. This is a major mistake that first time home buyers commit. In fact, you shouldn't even enter an Open House without your agent, or at least, your agent's card and contact information. When you consider that your first home will be the biggest single transaction in your life so far, it's easy to see why you need a real estate agent in your corner. Would you represent yourself in court case worth several hundred thousand dollars, or perform your own surgery? Nope, didn't think so.

10. Not looking beyond the house. First time home buyers can focus so much on potential homes that they can overlook that what's outside the home can and will influence both their quality of life, and the future value of their home. Avoid this mistake by asking questions about future development, zoning, roadwork plans, and other things that will matter - not today, but eventually.

We've covered a lot of territory here (again, thanks to the smart folks at Investopedia.com) on the 10 biggest mistakes that first time home buyers make.

Now, to end on a happier note, we can focus on the smartest thing that a first time home buyer can do - and that's simple: Find a real estate agent who specializes in helping first time home buyers. Because your needs are different than those who are buying their fifth home, or may want to purchase an investment property.

A real estate agent who specializes in helping first time home buyers will know what questions to ask, what information you need to know, what pitfalls to avoid (yes, there are more than the ones noted above - those are just the top 10, remember!), how to maximize value while minimizing risk, and how to be thrilled with your new home buying experience!
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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.