Buying a home is an exciting part of your life! And buying YOUR FIRST home is an amazing accomplishment. That being said, there are a couple things to look out for to make sure you don’t get buyers remorse. The first mistake and the biggest BY FAR, is when first time home buyers go out and see properties without being financially qualified. I feel like too often buyers tell themselves “we don’t need to talk to lenders before we go out and look at houses.” I’m telling you right now, that is the WRONG way to go about it! You HAVE to get pre-approved BEFORE you go out and look at houses. If you don’t, you’re setting yourself up to fail. Why am I saying this? Why do real estate agents tell you to do this? Well, you don’t KNOW what you can afford until you’ve been TOLD what you can afford. Sure, there will be options throughout the home buying process where you could go this route or that route, but your budget and what you actually pay is NOT your choice, it’s the lender’s responsibility to come up with the numbers.. You may think you can afford a $600,000 house in the middle of downtown, but in reality, you can only afford a $300,000 house 25 minutes away from downtown. One of the benefits of being a part of the Fitzpatrick team is that I have a bunch of local lenders that I can recommend so you can avoid this first big mistake!
The second mistake for first time home buyers is searching for a “Unicorn”. Meaning, that checklist of everything you want in your 100% perfect home, I hope you wrote that in pencil and not pen because you’ll most likely need to make some adjustments! The perfect home with the fenced in backyard, open floor plan, finished basement, walking distance to your favorite cafe, with an ocean view… that doesn’t exist. And if it DOES exist, it’s going to be twice your budget. It’s important that you come into this process mentally prepared to make some sacrifices. Start to reconsider your priorities and that will help us as we search for your new home! The goal is to find a home that meets 75% of your criteria and then it’s your job to finish off that 25% yourself! Remember this is not HGTV, this is real life! So be prepared to lower your expectations a little bit! If you want to learn more about setting criteria for your ideal home, make sure to check out our previous video, linked in the description below.
Mistake number three is expecting your house to increase in value. The reality is, after you buy your house it might not increase in value. It actually might even decrease depending on your market. This is about your mindset! You need to make sure you’re buying the home for the right reason! It’s true that the value of homes GENERALLY increase over time, but the keyword here is GENERAL. If your plan is to jump into the market at the exact right time and then sell and jump out at the exact right time, timing the market… you’re going to lose. Buy this first home for the right reasons. Do it for yourself, for your family, to increase your quality of life! NOT to time the market.
Mistake number four is underestimating your expenses. Utilities and unexpected repairs really eat up a lot more than you may initially think. A general rule of thumb is to estimate about 1% of the purchase price will be used for yearly maintenance, repairs and major yard work. There’s a saying that goes “once you buy a house, things start breaking” well it’s kinda true. There are A LOT of hidden costs involved in maintenance and repairs. While you may not know exactly what these costs are going to be, you should still be budgeting, accounting and saving for these situations. Hopefully you’ll be the lucky ones and you won’t have to use this emergency budget, but when something pops up, it’s always better to be prepared. It’s a cliche but it fits pretty well here, you should expect the unexpected.
The fifth mistake I see first time home buyers make is falling in love with the house. It’s EXTREMELY rare that the house you buy will meet all your current needs and all your future needs. If it does, great! Good for you! But if you’re like the rest of us, that house will be suitable for a handful of years and then eventually you’ll get the itch to move. DO NOT let your emotions get the best of you! It’s super important to continue to think LOGICALLY, if you fall in love with a house you will 100% overpay for it, OR someone will outbid you and you’ll start comparing every future house to this one that you lost. I can’t stress this enough, DON’T DO THIS! Have a short memory when it comes to house hunting, especially in today’s market. Why? Because houses are going to disappear, they’re going to go under contract, but ya know what, a house right around the corner is going to come up for sale, a BETTER house is going to come up for sale.
So there you have it, these were my top 5 mistakes first time home buyers should avoid! I didn’t mention these mistakes to discourage you. In fact, this is meant to ENCOURAGE you! Knowing these mistakes will help you set more realistic expectations when purchasing your first home. Earlier in the video I mentioned I have local lender recommendations, and with the Fitzpatrick Team comes so much more! We are the number one RE/MAX team in Rhode Island with over 170 transactions and $93 Million in sales. We have decades of combined experience on our team to help anyone from seasoned investors to YOU, a first time home buyer. That’s all I have for this video,, be sure to leave a like if you enjoyed this video and subscribe for more content like this! Let us know in the comments what video you’d like to see next! Alright, with that being said I’ll see you in the next one! Bye!