Here are the top 3 mistakes first-time homebuyers make according to a poll on Inman, a news website for realtors and brokers.
Talking to a lender gives you a realistic picture of what you can and can’t afford. Note there is a big difference between pre-qualifying and pre-approving you for a loan amount.
Pre-qualified: simply tell a lender how much you make, how much you have saved, your credit, etc. Based on the information you tell them, they will pre-qualify for a loan amount.
Pre-approved: submitting pay stubs, W2s, bank statements, getting a formal review of your credit report, etc. The process is quick and simple, but does require you to gather your information/paperwork to submit to the lender.
Make sure to NOT take on additional lines of credit, increase your debts, make large deposits or withdraw large amounts of money from your bank accounts until after closing. Whatever you do, do not go buy your significant other a car to celebrate the purchase of your new home on the way to closing; unfortunately, the lender will not be able to approve your loan. Denial after pre-approval happens more often than you think.
2. Waiting too long to make an offer
Buying your first home can be nerve-wracking. I’ve seen many first-time homebuyers look at every property in their price range, have difficulty deciphering the differences, eventually pick one out of 20, then find out there house already has an offer on the table because of the wasted time; that’s why picking a great agent is crucial. Your agent should listen to your list of requirements and get to know you as a person and your lifestyle. That way your agent can narrow down your options to just a few. There is no reason and not enough time to see every property in your price range. Trust your agent to do their part and show you only the houses that will suit you.
3. Offering too little
The real estate market determines the price of a home, it’s that simple. Homes are priced to sell if the listing agent has done their job properly. Offering too little for your dream home will most likely result in your offer getting tossed to the side. Hire an agent that knows the market, knows the prices, and will give you advice on the home price and what your initial offer should be.