The Nest

NestApple's Real Estate Blog

Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.

Avoid these mistakes you do when you buy a new house

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Congratulations on your thoughts on the new home! We can only imagine the economic and psychological hardships that are involved in the process of buying your new home. Saving money is one of the challenges that people face of all ages. It happens to greatly aggravate purchases that require a lot of planning, like buying a house. There are a couple of tips that might help you save money. Here is a guide listing all common first time home buyer mistakes to avoid. We will discuss the mistakes you make when you buy a new house. What are the most common first-time homebuyer mistakes? Let’s address the common first-time homebuyer mistakes to avoid.

Let’s address the common first-time homebuyer mistakes to avoid.

#1 Do not overlook your budget

The house you can afford does not only comes down to its asking price and closing costs. The homebuying process is draining: calculate the monthly mortgage payment and property taxes. Lastly, make sure you qualify for a mortgage.

Before you buy a new home, you must budget every component of the expenditure. Consider this as the first step ofmistakes when you buy saving money. This budget will essentially comprise the loans or any financial assistance that you took. Additionally, you must consider all the overheads or all the amenities that you consider crucial.

For instance, it is safe to invest in a well-known and trusted security system and furniture. These will pay dividends in the grand scheme of things.

Similarly, you might want to include the costs of equipment essential to daily life. It might seem trivial compared to other things, but clubbed up together, they can cost you a greater amount.

Short-listing the essentials by their priority or importance can help you buy them in several batches, likely to dampen the financial impact. Hence, it is advised to start listing all the amenities and budgets with everything in mind.

#2 Check the policies and insurances

Every state around the world has a different set of policies and regulations. As a new homeowner, you do not want to skipCheck the policies and insurances reviewing them. This mistake often results in hefty fines. For instance, certain states require you to register with the authority to install the security system.

This is to facilitate quick action on the parts of the authority in case there is any probable danger. It is imperative you know about the laws and the regulations.

To be on the safer side, you can consider hiring a lawyer to elucidate all the rules that require your attention. Failing to prioritize this can cost you fines and multi rounds to the authorities. Considering an insurance policy is important.

Due to the multiplicity of the availability of the insurance, it is important to check what is covered under different policies and then make an apt choice.

Getting insurance for your property is also mandatory in certain states. It is a decision that a smart owner makes to avoid additional costs in case of any mishap. It casts a safety net over your finances for certain unforeseen expenses happening in the future. All in all, it is important to have insurances and carefully go through the terms and the range of coverage.

#3 Do not make the mistake of not hiring a real estate agent

A real estate agent makes all the difference while buying a new home. They are often the financial saviors who come for acommon first time home buyer mistakes to avoid price. Hiring a real estate agent who does not know their job is a bad, bad idea. A good real estate agent may charge you higher, but that is ultimately paid off in the better deal they will get for you.

Real estate agents are acutely aware of all the shortcomings of a certain home. They can assist you with which property you should buy and which is beneficial in the long run. Thus, you can avoid any hasty or wrong purchases with the help of the agents.

Moreover, they are versed with all the intricacies of the policies and the overheads. They are capable of saving a lot of your money. Hence, investment in a good agent is considered very wise.

#4 Talking to only one lender

This is one of the common mistakes you make when you buy a new house. First-time buyers often get a mortgage from the first (and only) lender or bank they talk to, and that’s a big mistake. You’re potentially leaving thousands of dollars on the table. How this affects you: The more you shop around, the better basis for comparison you’ll have to ensure you’re getting a good deal and the lowest rates possible. What to do instead: Shop around with at least three different lenders, as well as a mortgage broker. Compare rates, lender fees, and loan terms. Don’t discount customer service and lender responsiveness; both play key roles in making the mortgage approval process run smoothly, especially when many lenders are backed up with applications. Get pre approved and don’t underestimate this process. Low-interest rates have led to a mortgage application boom, especially for fha loans. Some lenders are more behind on closings than others. Our mortgage rate tables are a great place to start comparison shopping. Later in the process, you can think of putting a larger down payment and getting private mortgage insurance.

#5 Fixating on the house over the neighborhood

Sure, you want a home that checks off the items on your wish list and meets your needs. However, being nitpicky about a home’s cosmetics can be short-sighted if you wind up in a neighborhood you hate, says Alison Bernstein, president and founder of Suburban Jungle, a real estate strategy firm. “Selecting the right town is critical to your life and family development,” Bernstein says. “The goal is to find you and your brood a place where the culture and values of the (area) match yours. You can always trade up or down for a new home, add a third bathroom or renovate a basement.” How this affects you: You could wind up loving your home but hating your neighborhood. What to do instead: Ask your real estate agent to help you track down neighborhood safety stats and school ratings. Measure your commute time and take things like proximity to public transit and walkability into account. Visit the neighborhood at different times to get a sense of traffic, neighbor interactions, and the overall vibe to see if it’s an area that appeals to you.

#6 Waiting for the ‘unicorn’

Unicorns are mythical creatures both in nature and in real estate. Looking for the home that checks every one of your boxes perfection can narrow your choices too much and might lead you to pass over good, suitable options in the hopes that something better will come along. Don’t let pie in the sky thinking sabotage your search, says James D’Astice, a real estate agent with Compass in Chicago. How this affects you: Looking for perfection might limit your real estate search or lead to you overpaying for a home. It can also lengthen your home search.  What to do instead: Keep an open mind about what’s on the market and be willing to put in some sweat equity, DiBugnara says. Some loan programs let you roll the cost of repairs into your mortgage, too.

Conclusion: mistakes you make when buying a home

There are many home buying mistakes you make when you buy a new house. This list of all the tricks to ensuring the best deal at an affordable price is not limited to the abovementioned points. However, it gives you a basic layout and covers the crucial points to consider while making this purchase. Some investments may seem unnecessary initially, but they are likely to pay off in the longer run.

Remember, the best way to avoid home buying mistakes is to read and research different properties before getting one.

Written By: Georges Benoliel

Georges has been working in Wall Street for the last 16 years trading derivatives with hedge funds. He has been an active real estate investor for over a decade. Georges graduated from HEC Business School in Paris and holds a master in Finance from ESADE Barcelona.

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