I'm sure you've heard the expression "Don't Sweat the Small Stuff". When it comes to buying a home, homebuyers can get easily side-tracked by small but fixable "problems," like an unappealing paint color. Because of this, they often overlook the bigger issues such a roofs, structure, etc. With low mortgage rates luring many first time buyers into the marketplace, I've researched the top 4 lessons to avoid for first time buyers as well as the seasoned purchaser:
1) Being turned off by problems that are easily fixed
One survey indicated that almost 9 in 10 first-time buyers are looking for move-in ready homes. They don't want to have to fix the kitchen or redo the bathroom before settling in. They also want to live near shops, their work and great schools.
While location isn't negotiable, many smaller fixes are, such as a worn carpet or scratched hardwood floor. Ask your real estate agent for help understanding how costly fixes will be and talk to the home inspector as well.
The lesson: High standards can work to your advantage, but don't forget that some fixes, like cosmetic makeovers, are relatively easy (and affordable).
2) Overlooking hidden costs
In addition to the down payment and subsequent regular mortgage payments, home ownership also brings forward other expenses from closing costs to the monthly costs of owning your home from insurance to utilities.
The lesson: Leave plenty of room in your budget to absorb the extra expenses of homeownership. That usually means borrowing far less than the bank approves and taking expected income fluctuations into account.
3) Failing to budget for DIY projects.
With so many DIY shows and magazines available now, many are lead to believe that anyone can take it on. But more recently, the art of fixing up houses has fallen out of favor. According to market research, the DIY home improvement market has fallen 21 percent in the last 10 years. The reason appears to be financial. While about 1 in 4 would-be-DIYers say they want to start on a major renovation, they simply can't afford it right now.
The lesson: When purchasing a home, reserve some cash for needed DIY projects during the first year of home ownership.
4) Misunderstanding new homeowners insurance coverage.
Understanding what your insurance coverage is essential when purchasing a home. Do not assume that you will pay the same price as the previous owners and it is good to do your homework on the different rates and what is included.
The lesson: Read the fine print of your insurance coverage, and if you don't understand it, talk it through with your insurer.
Since there are bound to be unexpected costs during that first year of home ownership, having some wiggle room with your budget can prevent late-night panic attacks when the dishwasher starts leaking all over your new floor. If you need assistance in finding just the right home, do not hesitate to contact me & I will do my best to help you find the home you are looking for.