Buying a home for the first time can be exciting but also somewhat daunting. It's a multistep process, and it's easy to make some costly mistakes along the way.
Our real estate agents have the experience to guide you through the process and help you avoid these common mistakes - as well as any others — that first-time homebuyers often make:
- Not getting pre-approved for a home loan
Meet with several mortgage lenders and get pre-approved for a home loan before you even start to look at homes. This requires disclosing your credit, income, assets, and debts to your lender so you can find out if you qualify for a mortgage and, if so, for exactly how much. This lets you know what price range you can afford and will give you a leg up if you put in an offer on a home and the seller has another offer from a prospective buyer who hasn't been pre-approved. Pre-approval also helps paperwork go more smoothly and quickly throughout the process and greatly lowers your chances of an unexpected issue with obtaining a loan showing up at the last minute.
- Looking for perfection
One house is unlikely to fulfill every item on your wish list, especially if you're a first-time buyer. Your budget may be limited because you don't have equity in a previous home to put toward a new one. Instead, look for a home that checks most of your boxes. Make a list of "must-haves" and "would be nice to haves" to help you prioritize what you're looking for. Keep an open mind, and look for a home that fulfills your "must-haves" and some — but not necessarily all — of your "would be nice to haves."
- Underestimating how much it costs to buy and own a home
Buying and owning a home involves more than just making a monthly mortgage payment. You'll also incur closing costs to cover expenses such as a home inspection and the real estate attorney's fees. And after you move into your home, you'll be responsible for expenses, including maintenance, repairs, property taxes, homeowners' insurance, and utility bills. Make sure you're prepared to handle these expenses as well.
- Making mistakes with your credit
If you're pre-approved for a mortgage loan, your lender will pull a copy of your credit report to help determine what loan amount you'll qualify for. You may then think you're in the clear and can open a new credit card or use an existing one to buy furniture for your new home or for other purchases. This could jeopardize your final loan approval, however. Your finances should stay the same after you're approved, so don't open any new credit cards, add any large purchases to your balances, close existing accounts or take out new loans.
- Forgoing a home inspection
You may be tempted to forego getting a home you'd like to buy inspected, especially if you're in a seller's market when homes are selling quickly and for close to their asking price. Skipping an inspection can be a costly mistake, however. An inspection can reveal issues with the home's structure or core systems, such as heating/air and plumbing. It can give you valuable information that could affect what you're willing to pay for a home or even if you still want to buy it.
Contact us if you're a first-time buyer who would like to start looking at Sioux Falls homes for sale. We'll help you navigate the home buying process smoothly, avoid mistakes, and find a home that's in your price range and is right for you.