5 Crucial New Home Buyer Mistakes – And How to Avoid Them

Dated: June 26 2021

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5 Crucial New Home Buyer Mistakes – And How to Avoid Them

Buying a new home is potentially one of the most exciting and stressful events anyone will experience – and whether this is your 1st or 5th home, there are some essential steps to take before buying

  1. Select the Right Real Estate Agent

First, as a home-buyer, you should work with an agent who specializes in the particular needs and expectations of a buyer. Working with an ‘all purpose’ agent, or one without specialized training or certifications for buyer representation can leave you with a lackluster experience, and potentially miss great homes that are not on the MLS, lose out on homes in a competitive market, or worse, not follow the proper representation and fiduciary responsibilities when negotiating on your behalf. Additionally, you want an agent with a personality and communication style that gels with your own to make the experience as pleasant, fun and productive as possible.

  1. Don’t Overspend

Get pre-approved for a mortgage – that will set your maximum realistic price, then work with your agent to look at the monthly ownership costs of your target home(s) to determine what fits within budget. Have a budget in mind, and stick with it. If you commit to overspending, it’s a decision that will haunt you every month and compound financial stress down the road.

  1. Buying on Emotion

This is not just a rookie mistake – it can happen to any homebuyer who allows emotion or urgency to overtake reason. Of course buying a home involves a certain amount of emotion. Without any emotional attachment to a home, why would you buy it? You want to imagine your lifestyle and experiences in the home as you tour and assess whether it fits your wants and needs, but make sure your needs are properly balanced with your wants. There is a saying – buy with your head, not with your heart.

  1. Buying Based on Wants, Not Needs

Similar to buying on emotion instead or reason, this is a typical problem where a homebuyer will have a long list of wants they are unwilling to compromise on. The result is a rapidly escalating emotional attachment to defending these wants, over the needs that should be taking precedence. In the end, the wants win, and the buyer makes a commitment to overspending. As part of the consultation process, a buyer’s agent will spend time working with you on a list of needs and wants, and will help you prioritize and filter this list to match available homes in your price range. A buyer’s agent is your advocate and fiduciary, and unlike a seller’s agent, will prioritize your needs and budget constraints and take the time to guide you to the right balance of price and features.

  1. Not Adequately Researching The Neighborhood

This is often a critical mistake that can result in problems down the road. While much of the home search process is focused on the home, some of that focus really needs to be on the neighborhood as well. A great neighborhood could be safer, offer better schools, friendlier neighbors, and improved resale values. A popular approach is to find the worst house in the best neighborhood. Once you give the new home some TLC and upgrades, the return on your investment could be far better and potentially offer more predictable resale results than looking for and overspending on the best house in an otherwise less desirable neighborhood. One of the best ways to meet your potential new neighbors is a quick stop at the local supermarket – it’s one place that gives a great representation of the overall community vibe and will help you assess how you might fit in with your new community.

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Steve Enchin

I've grown up in a real estate family with multiple commercial and residential multi-family properties, and bought/flipped/sold multiple properties, and have been guiding my own network in the purchas....

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