Common First-Time Homebuyer Mistakes to Avoid [Part 1]
Unfortunately, predicting the future is next to impossible. Things happen when buying and selling Real Estate that even defy reason, and all we can do sometimes is learn what not to do next time.
But, certain things can be done to prevent mistakes from happening. In an effort to avoid making big mistakes in purchasing a home, there are two key pieces of advice that I can offer – communication and planning. Communication is critical to better understanding, and that communication should involve everyone (including your spouse, your agent, etc.). Planning ahead by having a goal (homeownership) and saving money, gathering resources, asking questions, and keeping track of your progress by writing it all down helps you keep in focus – and ultimately brings you success!
What not to do
One of the more interesting experiences I have recently had that strays from this advice was helping a young married couple that recently moved here after their husband finished his career in the military.
They were staying with family at the time and had a baby daughter with another child on the way in the next few months. These folks were motivated to get settled in their own home. They didn’t want to continue staying where they were.
I met them at an open house that I was hosting, and after visiting the home for about five minutes, the husband informed me that they were ready to write an offer. I thought this was a little peculiar, but instead of immediately putting pen to paper, I took the time to learn more about their needs and background first. After talking with them and figuring out their interests a little more, I began to realize that these folks had no understanding of the process of buying a home. All they knew is that they could use the husband’s VA benefit, but they didn’t take the time to get pre-approved.
Additionally, they didn’t know what was available on the market. The husband’s rationale was that he knew how much house payment they could afford, so he found a mortgage calculator online and did some quick math to determine their overall price range – and then off to find some open houses in Olympia (Washington).
The husband seemed insistent that this was the right house for them and wanted to move forward before someone else buys the home, but I managed to convince them that we should go look at other homes on the market first before they make their final decision.
We saw three other homes in the area that were similar in value to the home I held open, and the husband informed me that they had changed their mind and wanted to buy the third home they toured instead. I advised them that it is in their best interests to be pre-approved first, otherwise the seller is not going to take their offer seriously.
Before they left, I gave them three references for local lenders in the area to contact immediately to get pre-approved. The next day, the husband called me and let me know that they changed their minds and were reverting back to making an offer on the home I was holding open, and they were going to contact my recommended lenders that day.
I followed up with them the next day to find out how they are doing, and the husband told me that he and his wife ‘finally communicated’ and decided that they were not yet ready to buy.
As a professional, my immediate instinct when I meet people that don’t really know what they’re doing is to help and educate them about the process and guide them toward making good choices. Sometimes for me, that equates to investing time and energy that results in nothing gained. But, what would have been more tragic in this scenario is seeing this young couple being taken advantage of and being placed in a precarious situation they don’t know how to get out of.
Having the desire to own a home is a good start, but you have to have a goal and a plan to get there. It was clear to me in the beginning that communication and planning were not yet part of the picture for this young couple, and hopefully, this experience for them will be a lesson learned before they actually buy a home.
An unfortunate event with a happy ending
Even the best communications and plans sometimes run into unforeseen circumstances. There is a client of mine that spent a lot of time with me looking for the right home that would be best for their family, and after much struggle, they finally found ‘the one.’
It was a lovely home, and suited their taste and needs to a tee. It was almost as if the home was tailor-made for them. They made an offer on the home, and it was accepted.
The home inspection did not turn up any major issues, and the sellers were very accommodating in making some requested repairs.
Everything seemed to be well, and then the unexpected – the husband was being relocated from his job to another part of town. They could no longer justify buying the home, but they were legally committed to it. Their only option was to lose their earnest money and walk away from it. It was tragic to watch it happen because they truly loved this home.
But as tragic as it was to witness, the bright side to the story was that the buyers were prepared to shift their focus and move on to find another home. The loss of their earnest money was unfortunate but did not create financial hardship for them.
They were able to find another home that was ideal for their needs, had a better overall value and was in close range to the husband’s place of business. The short-term stumble did not stop them from accomplishing their ultimate goal.