You know you are
ready to buy a home when owning is cheaper than renting and a
home purchase is a natural fit for your lifestyle and financial
needs, goals and obligations. Instead of making the home-buying
decision based on income alone, consider it in a more holistic
context that includes your complete financial picture. Viewing
home buying in a vacuum is a common misstep first-time homebuyers
should avoid. Other potential slip-ups include: Not knowing the market
In a buyer's market, buyers who feel a competitive edge are more likely to leap
before they look. The glut of information on the Internet makes obtaining home
buying and local market knowledge a relatively easy task. Real estate agents,
brokers, lenders, title companies and other real estate professionals offer free
seminars, workshops and classes. The vast library of real estate guidebooks can
also give you an edge. A lack of knowledge about home buying and market conditions
tends to perpetuate additional buying errors. Failing to get pre-approved
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Get pre-approved - in writing - for what you can afford, not what the lender
is willing to lend. A written pre-approval reveals that you are serious about
buying and it helps prevent you from shopping for more than you can afford. Low-balling
Uneducated buyers tend to offer too little and ask for too many concessions,
including asking the seller to pick up buyer's costs, to make extensive repairs,
or to provide a home warranty. That could insult the seller, even in a buyer's
market. In a seller's market, it will alienate a seller who has taken the time
to price the home right and prepare it for market. Paying too much
Avoid multiple-offer bidding frenzies. Make the same price checks sellers make
to price their homes right -- get comparables, track sale prices in your area,
scan the local newspaper to check asking prices, visit open houses and use a
knowledgeable real estate agent. Failing to buy low now to sell high later
Buy the least expensive house on the best block. Buy into the least expensive
neighborhood in the best community. The cheapest home in a neighborhood, community
or region in transition provides the greatest return on your investment in any
market.
As you learn to avoid mistakes, you'll find it easier to put your emotions on
hold long enough to reach your goal. That prevents buyer's remorse, an all-too-common
malady suffered by ill-prepared buyers.
