Top 3 First-Time Home Buyer Mistakes
How to Avoid Messing Up as a First Time Home Buyer
Real estate agents will often share with each other behind closed doors the mistakes made by first-time home buyers, but they typically won't tell their buyer. Oh, to hear the agents talk, they might have tried to warn the buyer, but they say buyers don't listen to them. Or, perhaps buyers believe some other person's advice, like, say, a relative or close friend, over the advice from their own agent.
Not every real estate agent wants to use what might be perceived as overly aggressive tactics by being completely frank and straight with a first-time home buyer. They don't want to frighten the buyer or make the buyer so freaked out that the buyer decides not to buy a home. They want to shield their buyers from hard truths that might hurt.
I've also heard agents say that some buyers need to learn a hard lesson first-hand, that it won't sink in otherwise if the buyer doesn't make her own home buying mistakes. This is not a tactic I endorse but some agents find it useful. By giving a first time home buyer the leeway to make a terrible mistake -- standing to the side and letting the buyer mess up on her own -- the agent is taking the chance that the buyer will instead blame the agent.
It's also a little mean. I don't believe that agents should give up on their buyers in that manner and we owe it to our buyers to put their interests above our own, even if it means they will get upset with us and decide to work with another agent.
First-Time Home Buyer Mistake #1: Not Listening to the Buyer's Agent
First-time home buyers might not trust the real estate agent they have hired. If that is the case, the buyer should immediately terminate that relationship. Fiduciary relationships are based on trust. There are good agents and there are bad agents, just like any business.
Hire an agent you trust. Once you trust and like that agent, listen to the advice given by your buyer's agent.
Your buyer's agent wants you to win and wants you to buy the home of your dreams. Every real estate market is different, and your agent might give you advice that you find difficult to agree with or understand. Keep asking questions until you feel comfortable. Your agent is the best person to advise you about any given real estate market. Don't lose the purchase offer because you didn't listen.
First-Time Home Buyer Mistake #2: Not Getting a Preapproval Letter
Because newbie buyers have never purchased a home before, they might not realize that market conditions often demand a preapproval letter. Sellers are not interested in showing their home to a buyer who cannot prove the buyer can afford to buy it. A buyer might feel differently and believe that once the buyer decides to buy the home, then the buyer will get a preapproval letter, but that's backward.
Not only that, but in the time it takes to get a preapproval letter, another buyer who is already qualified could swoop in and snatch the home away while the first buyer is waiting for approval. The preapproval letter is not for your agent.
It's for the seller. Don't even think about trying to write an offer without it.
First-Time Home Buyer Mistake #3: Buying the Most Expensive Home
You don't have to watch HGTV's House Hunters to know that buyers often pick the most expensive home. They are incredibly excited when home shopping and can easily get carried away. Buying a home is an emotional decision. It's normal for buyers to want the best home they can possibly afford, but sometimes emotions can overrule financial common sense.
Don't be afraid to buy a home that might have all of the basic requirements as far as configuration and location but might need a touch of TLC. If you can buy a home a little bit under your means, you'll probably sleep better at night, and you won't experience buyer's remorse. Look for a starter home, a home that in 5 to 10 years you might sell to move up.
A truly affordable home, not the home of your far off future, because most first-time home buyers have that one thing on their side that veteran buyers generally do not: time.
Elizabeth Weintraub's best first-time home buyer tip: Get your listings directly from your real estate agent's portal to MLS. Don't search for homes online at popular websites because those homes are often not for sale or have already sold. Your real estate agent has the best and most likely only accurate access to fresh listings.
At the time of writing, Elizabeth Weintraub, BRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.