Are You a First Time Home Buyer? Avoid These 5 Common Mistakes
A First time home buyer here in Los Angeles or in any other place in the world are naturally both excited and a little bit nervous. This is a huge investment as well as a huge commitment. It’s no time to make mistakes.
Mistake #1: Asking for advice from the wrong people
Caution may be the reason why so many first time buyers make a huge mistake right from the start: They ask for advice from people they trust – their friends and family.
Unless that person is a top agent who specializes in the area where you want to buy – or perhaps a home inspector – the ONLY advice you should ask of friends and family is for the name and contact information for an agent who has served them well and is comfortable working with a first time home buyer.
Should you need advice that your agent isn’t qualified to give, he or she will introduce you to the proper professionals.
Family and friends might mean well, but their advice is often based on past (outdated) experience or (worse) something they “learned” on TV.
Mistake #2: Spending too much money
Just because a lender says you CAN spend a certain amount for your new home doesn’t mean you should. Lenders see only part of the story of your life – they don’t know if you want to send your kids to an expensive camp each summer or if you look forward to dining at a 4-Star restaurant on Saturday nights.
Take their figures and work backwards – pulling money away from the housing budget that you want to use to enrich your life in other ways. Talk those numbers over with your lender before you begin looking at homes.
Then tell your agent the facts – With the dollars you have for a down payment and the amount YOU have budgeted for a monthly payment, your lender says you may spend up to $X for your home. As a first time home buyer, you definitely want to tread lightly on your first purchase.
Mistake #3: Making low offers
Oh yes, the TV says you can buy a home for far less than its list price, and in a down market you possibly could – especially if the house is in poor condition. But when the market is hot it becomes a “seller’s market,” and your low offer will simply be ignored. If you want a home, low offers are a waste of time and effort.
Mistake #4: Failing to take action when you find “the” house
We know – making that decision is scary, but indecision generally leads to someone else getting the house you wanted.
This is one reason why we tell buyers to have a pre-approval letter in hand before they begin to shop. When you know how much you can comfortably spend, it’s a lot less scary to take action immediately when you find the house you love.
Mistake #5: Looking for a home like your parents’ home
Your parents may have your “dream home,” and you may feel that you need or deserve one just like it. But stop and think… when they were a first time home buyer, their first home was probably a lot more modest. They probably moved up as their careers flourished and their fortunes grew.
If you’re just starting out, be realistic. Purchase a home that fits your budget and your needs, and give yourself time to match your parents’ station in life.
We all make mistakes in life, but these 5 mistakes don’t need to be among them.
If you’re searching for that first home here in Los Angeles, call me. I will make being a first time home buyer not so scary. I’ll help you find the home that fits your needs and your lifestyle – and fits into your budget.
Are you considering a move in the near future? Powerhouse Real Estate is here to help you before, during, and after the process. Darryl has prepared an e-book “Home Seller’s Guide to Money Making Fix-Ups” that we would like to offer you or anyone you know.
Visit our office at 433 N. Camden Dr. Suite 400, Beverly Hills, CA.