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6 mistakes to avoid as a first-time home buyer


Hello beautiful people! This week we have a featured blog from our friends over at openlistings.com

Hope you all enjoy and have a wonderful Thanksgiving tomorrow with friends and family!

Check out the Open Listings Blog to read more great articles related to real estate!

Buying a home for the first time is a big deal.

To help you get ahead, we’ve outlined some first-time homebuyer tips by calling out six of the biggest mistakes that you should avoid going into the purchase of your first home that could end up saving you a lot of time, money, and frustration.

Mistake #1: not getting pre-approved

Many first-time buyers make the mistake of thinking that they don’t need to get approved for a mortgage until they’ve found their dream home.

Unfortunately, that often ends up being too late.

These days, most sellers require that pre-approvals be submitted along with any offer, and, since your finances need to be vetted before the lender will agree to grant you a loan, this process can take days or even weeks.

Instead, we recommend applying for a pre-approval before you even start looking at a available properties.

Doing so will give you extra time to work on your finances, if needed, and will ensure that you’re ready to submit an offer ASAP once you’ve found your perfect match.

2. Borrowing the maximum amount

Once you have your pre-approval in hand, it’s time to decide how much you can afford to spend.

Many buyers mistakenly believe that the figure they’re given on their pre-approval letter should serve as their target sale price. However, make sure that this move won't leave you feeling “house poor.”

Instead, it’s better to think of loan amounts as a range. You have the ability to borrow up to the amount on your pre-approval, but you don’t necessarily have to go that far.

The better move is to do some budgeting of your own.

First, look at your income and expenses to determine how much money you’d feel comfortable putting towards a mortgage payment each month. Then, using that number, play around with a mortgage calculator until you land on a price of how much house you can really afford.

3. Overestimating your abilities

Sometimes buyers are willing to take on any number of repairs and remodeling projects in exchange for for a low sale price.

Unfortunately, though, what ends up happening in many of these scenarios is that they end up finding that these properties were steals for a reason.

Often, the repairs require more time, money, and skills than the buyers can afford.

If you’re looking at fixer upper properties that require a lot of TLC -- especially foreclosures, short sales, or auctions -- you need to be honest with yourself about your abilities.

Do you have any previous remodeling experience? Can you afford to hire professional help? Are you prepared to cope with unforeseen problems and expenses?

Though some of these things may be hard to admit, doing so can end up saving you a lot of frustration in the long run.

4. Skipping the fine print

Yes, you should always read every contract you sign in full.

But, as anyone who’s ever sped through a “Terms & Conditions” agreement can tell you, that’s easier said than done.

While it might be tempting to simply skim your Agreement of Sale (and any addendums), resist the urge. This mistake could end up costing you.

Successful real estate transactions depend on each party fulfilling their respective contingencies by the deadlines specified in the agreement.

By signing, you’ve agreed to fulfill your end of the bargain. If you fail to meet those obligations, the seller may be entitled to take your deposit monies in reparations.