Buying a home can be a stressful process. There’s so much to do and so much you don’t know that “overwhelming” hardly seems like an appropriate description of how it feels. And even though you don’t want to scare yourself away from the entire process, you still need to be wary of falling into a few common traps that first-time buyers generally don’t avoid. If you’re aware of these five potential mistakes — and able to keep yourself from making them — then you’ll be saving yourself some significant stress on your homebuying journey.
Mistake No. 1: Not hiring a qualified real estate agent, like Success Home Team
It’s so easy to find homes online these days that you may wonder why a real estate agent is even necessary. After all, isn’t the hard part — finding the place you want to buy — something you can do yourself?
Well, maybe. But in the Twin Cities red-hot market, you’re probably not seeing the most updated listings — that home you just fell in love with online might be under contract before you can set up a time to tour it.
Not only can us at Success Home Team, make sure you have access to listings the second they hit the MLS, but our qualified agents will provide expertise on the area where you want to move.
Our agents are what we call area experts and guides. They will have no trouble answering your lifestyle questions about the property and neighborhood. Our team is also what we refer to as transaction-management aces. We will all help you understand the process and guide you through it to ensure a successful closing.
A qualified agent and team is an invaluable resource.
Mistake No. 2: Not understanding your down payment options
The biggest headache for so many first-time buyers is the down payment. If you’ve ever bought a car, then you’re probably familiar with the concept — it’s money that you contribute to the total cost of the purchase.
A down payment of just a couple thousand dollars can get you a head start on your car. If you don’t have a certain amount to put down on your home loan, however, you might find yourself paying private mortgage insurance (PMI) on the lifetime of the loan. Depending on your credit score, the bank, and other factors, PMI could cost between 0.5 percent to 1 percent of the total loan amount.
There’s one more thing to know about down payment options: Some government organizations and lenders try to incentivize first-time homeownership by offering free down payment grants or loans to qualified buyers. Depending on your age, income level, credit score, and other factors, you could qualify for free money to wrap into your down payment.
Start by giving us a call so we can connect you with one of our preferred and local Twin Cities lenders. They have helped many first time home buyers and will be more than willing to assist with your transaction as well.
Mistake No. 3: Not getting prequalified for a loan
Between the amount of money you plan to put down on the home, the potential PMI and other cost factors, your monthly cost could be significantly more (or possibly less) than some of those calculators will show you online.
So before you trust those “estimated monthly mortgage loan amount” numbers that you see popping up next to your potential new dream home on Zillow or a brokerage website, it pays to figure out what you can actually afford — and that means getting prequalified for a home loan.
This means you should talk to one of our preferred mortgage loan officers and they will tell you how much money you can get for your home loan. The prequalification letter you’ll get as a result is much more credible than a quick qualification you can pull up on an app — and that means sellers will take it more seriously when it comes time to put in an offer.
By working with one of our preferred mortgage loan officers, they will walk you through what you can afford. They will ensure you consider your various expenses each month on top of your mortgage: Homeowners’ insurance, taxes, possibly flood insurance, PMI on your loan, groceries, utilities, etc.
We all work as a team on your behalf because we want you — yes, YOU! — to be a successful homeowner.
Mistake No. 4: Not understanding what’s fixable and what’s a deal-breaker
Those drop panels in the ceiling are hideous, and you can’t imagine how anyone can fit into that minuscule bathtub.
Are those annoyances that can be fixed or deal-breakers that mean you should pass on the property entirely?
This is another area where a good real estate agent, such as Holly Stomberg from Success Home Team, is important. Real Estate Agents see so many houses in various stages of repair and updating that we can show you where you can claim another foot or two for bathtub space (and help you figure out how much it will cost and provide recommendations as to who can do the job) or let you know that the ceilings are too low for any changes to make much of a difference.
In the Twin Cities market, entry-level homes are getting snatched up as soon as they hit the market, knowing what’s acceptable and what you just can’t take is a huge advantage — it’ll help you make a decision, with confidence, on the fly.
None of these mistakes will keep you from buying a home of your own — but they could delay the process and cost you hundreds (if not thousands) of dollars at the end of the day.
It all starts by hiring Success Home Team. You’ll be signing the closing papers on your dream home before you know it!