All home owners were first-time buyers at one point. And you can learn from their mistakes. These are the most common mistakes we see first-time buyers make:
- Buying more home than they can afford.
- Not getting pre-approved for a loan.
- Not using a real estate professional.
|We have several homes listed that would be great for|
first-time buyers, like this one at 844 S. Kickapoo near MSU
and the one below at 310 N. Marie in Nixa.
The first two mistakes go hand-in-hand. Actually, all of these go together. When you are ready to buy a home, a good real estate agent will help you figure out how much home you can afford and encourage you to get pre-approved for a loan. Avoiding all three of these mistakes will save you time, money, and mental anguish.
Several factors determine how much home you can afford, mainly the down payment, closing costs, and monthly mortgage payments. See our previous blog for more about determining how much is realistic and manageable for you.
Getting pre-approved for a loan forces you to go through the process of how much home you can afford if you haven’t already done that. Most lenders require that your home mortgage payment fall between 28% and 34% of your gross monthly income. The mortgage payment and all your other monthly debt payments should range between 36% and 50% of your gross monthly income. The lender will take into account your income, your assets, and your credit report when determining whether and how much you qualify for. (A good real estate agent can steer you to reputable lenders.)
Going through the pre-approval process helps you start looking in the correct price range. You don’t want to look at 30 houses and then find out all are out of your reach. When you have been looking at $200,000 homes, it’s hard for homes in the $150,000-range not to be disappointing.
Of course, as realtors, we think real estate professionals can help buyers. But if you talk to your friends and neighbors who have bought homes, they are likely to agree. Like getting a loan pre-approval, a good agent can also save you time and money and mental anguish.
You are likely to look at lots of homes on the Internet before you even contact an agent. But an agent can put that home into context for you. You benefit from the agent’s knowledge of the area and neighborhoods. She can turn you onto areas you may not have considered—or even get authorization to show you homes you love but are not even on the market.
A good real estate agent can also take you to look at many houses at one time—much more efficient than waiting on open houses or making arrangements on your own. She will quickly know your likes and dislikes, helping to filter out the homes that would be a waste of your time for you to visit.
One more reason to use a real estate agent: A realtor is free representation for the buyer. She is your advocate in the process and serves as your personal expert in one of the major purchases of your life.
As always, we would be happy to walk you through the home-buying process. We want to help you avoid the pitfalls many first-timers make.