Buying a home is the single largest financial transaction most people will ever make, and its effects on their household budgets will likely last for decades. That’s why it’s so important to start the process right and stay alert for pitfalls that can have far-reaching consequences. 

Whether you’re a first-time home buyer or have bought property before, our list of home-buying mistakes to avoid can help you make the best decisions throughout the process.

Not Setting a Price Range

If your house hunting leads you to a home that you absolutely love, it will be a challenge to keep your emotions out of the decision-making process from that moment on. It’s easy to rationalize spending a few thousand more to get the property of your dreams, but that can add up to tens of thousands of dollars in interest over the life of your mortgage.

To avoid this mistake, consult a lender to find out how much you are qualified to borrow, but keep in mind that lenders may qualify you for more than you can comfortably afford each month. Put in the work to calculate what “affordable” really means for you.

Next, determine both the low and high ends of your price range before you start house hunting. Take the time to look at several properties at the lower end because you may find the one that’s right for you and save a lot of money that you can use somewhere else. If you still find yourself looking, don’t tour any homes with an asking price above the high end of your range so that you’re not tempted to exceed your budget.

Not Having Financing in Place

This mistake can cost you your dream home if that home is in a fast-paced market. In the past, the process of making an offer and the counteroffer back-and-forth that followed it moved along at a much slower pace. 

If your target neighborhood is a seller’s market, you’ll want to be ready to make a solid offer the moment you find a home you want to buy there, and that means being pre-approved by a lender.

Not Considering the Neighborhood

Another situation in which emotions can get the best of you is when you find a great house without knowing all you can about the neighborhood. Here are a few things to check out to help ensure you land in the right place:

• Home values: It’s fairly easy to find online resources for researching how home values have changed over the last few years. If values have been falling in the neighborhood, try to find out why.
• Zoning laws: If your desired home has you imagining a swimming pool in the roomy side yard or a new detached garage in the back, get to know the zoning laws for the area.
• Homeowners’ associations: If you buy a home in a community that’s governed by a homeowner’s association, you will be bound by a legal contract to follow the community’s rules. Get a copy of the bylaws and restrictions to make sure you can live with them before you sign on the dotted line.
• Traffic and noise: Some neighborhoods have traffic and noise levels that can vary throughout the day or even the seasons. If, for example, you’d be just a few houses away from a high school, you could expect more activity at the beginning and end of the school day during the school year (with some marching band action on Friday nights). This may not be a problem for most people, but if you’re someone who works nights, such a location may not be ideal.

Skipping the Inspection

Your lender will probably require an inspection, but if you’re paying cash or have a mortgage lender that doesn’t require one, it’s still an essential part of the home-buying process. 

Although a professional home inspector’s service may add to your initial costs, their expertise can keep you from closing on a home that you’ll need to pour more money into if major problems are discovered. If you forego an inspection, particularly on an older home, be prepared for unexpected expenses to make the home safe and sound.

Overlooking a Home’s Potential

On the flip side of inspection, results may turn into a long, expensive list of fixes. Also, you don’t want to overlook a home that needs only minor fixes or cosmetic updates to be worth considering. Look past flooring that’s past its prime or paint colors you don’t like to see what the home could look like with minimal upgrades.

Even if you can’t get to minor fixes for a year or two, you won’t want to miss a house that’s in the right neighborhood at the right price today.

First-time Home Buyer Mistakes to Avoid 

In addition to the home-buying mistakes we pointed out above, first-time buyers should also avoid these finance-related mistakes:

• Not saving enough for the down payment: The lower your mortgage amount, the more interest you’ll save over the life of the loan and the lower your monthly payment will be. Additionally, a down payment of 20% or more lets you avoid paying a private mortgage insurance premium every month.
• Choosing the wrong type of mortgage: You can avoid this mistake by learning as much as you can about mortgages and the advantages and disadvantages of each type. Talk to more than one lender about the differences between fixed-rate and adjustable mortgages and 15- and 30-year mortgages. Also compare the interest rates offered by each lender, since a point or two can save you thousands of dollars over time.
• Not checking your credit report before applying for a mortgage: First-time borrowers can be unpleasantly surprised to learn from a lender that their credit reports are inaccurate or incomplete, or have negative marks. Good credit is a plus when it comes to favorable mortgage terms and interest rates, so you’ll want to take the time to check all three of your credit reports from Equifax, Experian, and TransUnion reporting bureaus and work on correcting any issues.  

We Make Home Buying Easier

If a home in an Amelia Island community is your dream, the experienced agents at Amelia Island Real Estate Services are ready to help you navigate the buying process. Check out our step-by-step guide to buying property in Amelia Island, then give us a call at 904-277-5980 or reach us online to put our home-buying experts on your team.