When you’ve been in the real estate business as long as Network Real Estate has, you’re bound to have seen a few buyer blunders. When buying a home, even seemingly minor missteps can sometimes lead to disaster. Last month, we gave our Top 10 Tips for First-Time Homebuyers … but what should you avoid during the home buying process? We’ve compiled the most common and detrimental errors homebuyers can make, so you can learn from their mistakes.
1. Don’t get emotionally attached too early. Although home ownership has everything to do with your life, your family and your dreams, it’s important to remember at every stage of the process that home ownership is foremost a financial investment – potentially the most significant investment you’ll ever make. Until you’ve signed the paperwork, try to view the process for what it is: a business transaction. Getting emotionally attached to a home early in the buying process makes it harder to be objective about important factors, such as price and the home inspection results.
2. Don’t go for a home strictly because of its wow factor. Wilmington, N.C., and the surrounding beaches have no shortage of gorgeous homes, but no matter how pretty it is on the outside, a home with plumbing, electrical or foundational issues will lead to buyer’s remorse. To make the smartest investment, go for a home that is structurally sound above all else. Cosmetic issues are much less expensive fixes than structural ones.
3. Don’t spend beyond your means. Work with your Realtor to calculate realistic mortgage payment estimation, and only consider homes that fit your long-term budget. A good Realtor will help you to work within your budget and negotiate on your behalf, rather than try to sell you a home beyond your price range.
4. Don’t make late bill payments when you are in the process of buying a home. A bill that is more than 30 days late will damage your credit score when you need it most! Typically a credit score of at least 750 will secure you a good mortgage loan rate. Don’t let a small oversight like an unpaid bill affect your chances at a lower rate.
5. Don’t change jobs. Mortgage lenders want to see stability and consistency in income. So don’t change jobs or start your own business when shopping for a home in order to remain ideal in the eyes of lenders.
6. Don’t get a new credit card. This may seem like backward logic, as a consistently paid credit balance can help you gain credit. But when shopping for a home loan, a new credit card can raise your debt-to-income ratio, which is one of the major factors lenders consider.
7. Don’t buy a home because you feel like you’re “supposed to.” We love selling homes at Network Real Estate, but we also know that home ownership is a huge step. Not everyone is ready for the challenges of home ownership – and that’s okay! To get the best ROI and the most peace of mind, wait until you are financially stable, settled in a place you want to live in for the next several decades, and, above all, that you want to own a home. Renting is a great and convenient option for those who aren’t ready to be homeowners – be sure to check out the lovely homes that Network Real Estate has available for long-term rental in Wilmington and the surrounding beaches.
8. Don’t forget to get the home inspected during the due diligence period. The average due diligence period is 10 days, so make sure you hire a trusted contractor to perform a full home inspection straightaway. The timing is crucial – buyers who neglect this step are taking a massive gamble.
9. Don’t forget to buy insurance during the due diligence period. Homeowners insurance is a must. Most insurance policies have a 30-day waiting period before coverage takes effect, so be sure to get insurance during the due diligence period to avoid potentially hazardous gaps in insurance coverage. We also recommend that Wilmington and beach residents strongly consider flood insurance.
10. Don’t go it alone! The benefits of working with a Realtor are endless, especially when it comes to the negotiating process. Buyers who walk into the process unrepresented immediately give sellers the advantage. A good Realtor will look out for your best interest and help you avoid the pitfalls we’ve outlined here!
Home ownership can make a great investment, but remember that it’s a long-term one. By knowing what mistakes to avoid early in the process, you set your investment up for success in the long run. To speak with one of our Realtors about finding the home that’s right for you, contact Network Real Estate today.