7 Mistakes First Time Buyers Make (And How to Avoid Them)

Buying a home for the first time? We reveal the most common mistakes first time buyers make, so you can avoid them.

Buying your first home can be an incredibly exciting yet nerve-wracking time. And if you don’t have a lot of guidance, then it can be easy to fall into the traps of some of the common mistakes first time buyers make.

Thankfully, armed with a little extra knowledge, you can alleviate much of the stress associated with buying your first home. You can jump in with confidence and feel sure about making the best possible decision.

In this post, we’re going to cover seven of the most common mistakes first time buyers make. We’ll also let you know what you can do to avoid them. Let’s get started!

1. Relying On Open Houses to Find Your Home

While cruising open houses can be a convenient way to view homes, this definitely shouldn’t substitute working with a realtor. A realtor can arrange private viewings for homes you’re interested in. This gives you flexibility and the opportunity to take a look around without others obscuring or swaying your view.

Of course, the benefits don’t end there. A realtor will offer a plethora of professional help and advice to guide you through every step of purchasing your new home. This is especially important for first-time buyers who are navigating unknown territory.

Be sure to do your research and find an excellent realtor who is highly knowledgeable about your desired area.

2. Falling in Love With the Staging of a Home

One of the most common mistakes first time buyers make is to be overly impressed with the staging of a home. Yes, staging is a powerful sales tool, and it’s there to win you over. However, as a savvy buyer, you need to be able to look past the pretty packaging.

If you’re able to focus more on the layout and features of the home, you’ll be able to make a better decision about whether it’s the right one for you. You’ll also avoid buyer’s remorse the first time you view the house without the beautiful decor.

3. Buying a Home for Today Instead of One You Can Grow Into

As a first time buyer, it can be difficult to think about the longer term. If you’ve been renting until now, you’re likely used to finding a place that suits your immediate needs at a decent price. You’re probably not thinking in terms of two to five years from now.

The thing is with buying a home, you can’t just up and leave at the drop of a hat. The costs associated with buying and selling a house mean that’s it’s simply not financially viable to hop from one place to the next year after year.

Before you even start looking, make sure you think about what you’ll need in the future, at least two to three years down the road. This way, you’ll have the luxury of waiting for a favorable market if and when you decide to move. You might find yourself selling sooner, but it’s always good to be prepared to stay for the long haul.

4. Focusing on the Home Rather Than the Neighbourhood

When it comes to thinking longer term, it’s important not to focus too much on the house itself. Aside from a great house, you also need to be sure about the neighbourhood you’re buying into. A dream home simply isn’t a dream home if the location isn’t right for you.

Many first time buyers fall into the trap of buying a big shiny new house in a less than ideal neighbourhood. The fact is that you can always change and even rebuild a house, but you can’t change its location.

A good approach to take is to choose your neighbourhood first and then find out what you can afford there. You may want to be close to amenities, schools, parks, and more, depending on your situation. Take the time to get to know a neighbourhood and envision yourself living there. Then, be sure to find a realtor who knows your chosen area well.

5. Waiting Too Long to Get Pre-Approval

When you first start house-hunting, the notion of actually putting in an offer and purchasing a home might seem like a long way off. However, when it comes down to it, these deals often happen very fast. That’s why it’s so important that you’re prepared, especially when it comes to finances.

Getting pre-approved for a mortgage before you start looking is important for a couple of reasons. First, it means you can be certain of your budget. It can be heart-breaking to find a dream home you think you can afford, only to be crushed by the banks. Also, pre-approval means you’re ready to pounce and make an offer as soon as you do find that home you love.

When it comes to your mortgage, don’t forget to shop around. Also, don’t be afraid to try to get a better deal by asking banks or brokers to match other rates.

6. Underestimating the Importance of Credit Rating

On the subject of financing, a common mistake is underestimating the value of a good credit score. Plenty of people have never had to think about their credit rating until the first time they apply for a mortgage.

Poor credit can vastly lower the amount that banks are willing to lend you, and can even prevent them from wanting to approve you at all. This is especially true in today’s tighter lending environment.

It’s worth checking your score before heading to the bank to see if you need to do some damage control. Although it can take some time, it’s always possible to build you score back up. In the meantime, if you’re set on buying now, you may want to consider alternative options like having a family member co-sign for you.

7. Not Understanding the Costs Associated With Buying a Home

Another of the most common mistakes first time buyers make is underestimating the costs associated with buying a home. Aside from the house price, there are so many other costs to consider, including land transfer tax, lawyer fees, title insurance, and more.

Land transfer tax is currently extremely high for Toronto residents as you have to pay a large municipal tax on top of the provincial portion. There are rebates available for first time buyers, but it can still represent a large cost. While lawyer fees, moving expenses, and other costs are less significant, they still all add up and have to be taken into consideration.

As a first time buyer, chances are you’re struggling to scrape together a down payment and are maxed out when it comes to your mortgage. Be sure to take into account all of the additional costs, so there are no nasty surprises come closing day.

Wrapping Up

Buying your first home can be an incredible experience. However, it can be an extremely stressful one too. This is especially true since there are so many mistakes first time buyers make and that you have to try to avoid.

In this post, we’ve armed you the information you need to become a confident buyer. We’ve revealed seven of the biggest mistakes first time buyers make and how to overcome them.

If you’re a first-time buyer and want to learn more about the process from a professional realtor, contact us for a buyer consultation today. The ThompsonSells team is always ready to help!

Image credits: Photo-Mix, Pixabay, Freestocks, Tero Vesalainen, Pixabay