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As of June 25, 2018, we’ve made some changes to the way our mortgage approvals work. You can read more about our Power Buyer ProcessTM.

As a first-time home buyer, you’re stepping in to the world of homeownership for the very first time, which can be simultaneously exciting and scary. It can seem overwhelming when you’re beginning to move through the home buying process, but know that you’re not the first to exclaim, “I’m ready to buy a home,” and you won’t be last.

While every home buyer’s experience will be uniquely their own, there are a couple of common mistakes that every first-time home buyer makes. But don’t worry – most of them are totally avoidable.

We break down the top 10 mistakes first-time home buyers make along with advice from real estate agents and mortgage experts on how you can avoid them.

Skipping the Preapproval Process

When you first begin the home buying process, it can be tempting to jump right in to the home search. But before you hop online or walk in to an open house, it can be helpful to have an idea of what you can afford to spend on a home. That’s why it’s important to be preapproved by a reputable mortgage lender.

At its core, a preapproval is a formal analysis of your financial situation based on your income, credit and other financial factors. In the end, you’ll receive a dollar amount that explains how much you can afford to spend on a home. This formal document is called a preapproval letter.

By now, you might understand just how important this information is. It’s better to know for certain how much you can afford to spend on a home, rather than blindly jumping in to the home search.

Not Knowing How Much Home You Can Afford

While similar to having a preapproval letter, knowing how much home you can actually afford, based on your projected monthly mortgage payment amount, is vital. Depending on your financial situation, this number might not match the number of your preapproval, so you should always use what you can actually afford as the determining factor when buying a home.

“Many lenders will tell you how much you can qualify for. This is the maximum amount a lender will lend to you and does not mean that it is wise to spend that much money,” advised Mark Ferguson, real estate agent and creator of “Figure out how much money you can spend on a house and still save money.”

Make a budget that breaks down your income and monthly expenses, and then use a mortgage calculator to find out how much you can afford to spend each month on your new home.

Forgetting Additional Expenses

Of course, there’s more money involved in the home buying process outside of the down payment and monthly mortgage payments. Another common mistake that first-time home buyers make is forgetting (or not knowing) that there are additional expenses that go in to buying a home.

For example, property taxes, home insurance, appliances, furniture, maintenance and utilities are just a few expenses a new homeowner should be aware of.

“Some first-time home buyers don’t take the ancillary costs into account,” explained Josh Grabernstein, product analyst at Quicken Loans. “This could include anything from having to buy new furniture for a home, to fixing items around the house or yardwork. Any costs that were previously covered by a landlord may have an impact on a home buyer, including taxes and insurance.”

Much like using a mortgage calculator to determine how much home you can afford, make sure you do the math to see if you’re financially ready to buy a home.

Being Too Picky

Of course, you should buy a home that works with your budget and your needs. However, make sure you don’t get caught up in a few unnecessary wants that keep you from buying a home altogether.

“First-time home buyers often have expectations of what they want in a home that’s not always available to them in the market,” explained Doug Gartley, an associate broker at Rocket Homes. “It’s important to broaden your search and relax your criteria. At the end of the day, you may not get the items you were looking for, but you’ll get in to a house that is manageable for a first-time homeowner and allows for flexibility.”

While you may want the home of your dreams, remember that as a first-time home buyer, you’re typically looking for a starter home, usually something smaller and more affordable than the larger home you might buy down the road. So, while you may want the new hardwood floors, granite countertops and fireplace, remember that this first home is filling a need, rather than a want.

Unwilling to Compromise

Before you start looking for a home, make a list of your needs versus your wants in a home. Base your ultimate decision on your needs, like location or price range, rather than wants, such as hardwood floors or granite countertops.

Some first-time home buyers are unwilling to compromise on the home they want, but oftentimes, the home is out of their price range or doesn’t fill a need.

“It’s a tough market out there in most major areas, so it’s getting harder and harder to find your dream home within a manageable budget,” warned Chris Taylor, a broker with Advantage Real Estate. “Though it’s still possible, often when you’re finding a more recently renovated home that meets all of your criteria, you’re paying a premium on it.”

You don’t want to miss out on an opportunity to buy a home that works for your needs, just because it doesn’t fulfill your wants.

Robert Nelson, a real estate broker for Center Coast Realty, suggested creating a list of must-haves, deal breakers and basic criteria of what you want in a home. Then base your search off of what means the most to you.


However, a starter home doesn’t have to be a hideous compromise that makes you miserable until you make the move to your next home. There are plenty of physical aspects of a home that can be customized to your liking – you just have to have vision.

For example, if you can afford it financially, you can replace the 1970s-shag carpet or wood paneling to something more your style. If you happen to be handy, there are a lot of updates you can do yourself, just be careful you don’t go overboard!

“If you’re willing to compromise on a home that needs more work or hasn’t been updated, you’re likely to be able to save some money that you can use to make those improvements, which in turn increase your property value and your equity in the home,” advised Taylor.

Even if you can’t afford the updates upon moving in, you can save up over time and add improvements little by little until the house is more your style.

Too Emotionally Invested

Buying a home is an emotional rollercoaster, filled with ups and down, triumphs and a few slip-ups. There’s nothing wrong with being emotional, however, don’t let it blind you from the reality that it’s a transaction.

“During the home buying process, it’s easy to go down that path of emotion,” explained Gartley. “There’s nothing wrong with that, just be careful about getting attached until all contingencies have been addressed and you’re clear to close.”

These contingencies include the inspection and appraisal process. While you might think the home looks like it’s in good condition, something could come back in the inspection that could say otherwise, like structural damage or a roof in need of replacement.

“Take a look at other homes in the neighborhood. Is the price of this home in line with the rest of the area? Are there any minor issues that could turn in to major ones? Don’t let yourself get swept up in the excitement of home buying before taking a serious look at whether or not it’s a good deal,” said Steve Westmark, a real estate agent with RE/MAX Advantage Plus.

Not Hiring a Professional Inspector

This leads to the next point about hiring a professional inspector. Before you move in to a new home, you should hire a professional home inspector to go through the house and check for any issues before moving in.

Skipping the home inspection, or hiring an unqualified family member or friend to perform a home inspection could lead to issues down the road. You need to know what shape the house is in before you buy to avoid getting stuck with a money pit of home repairs you didn’t plan for.

During this process, the inspector will check the structure, roof, attic and basement – among other areas of the home – to ensure that you are all set to move in.

“Spend the extra money to have a professional home inspection look at the house,” asserted Gartley. “In the end, it will pay for itself and could save you from going down a path of issues down the road.”

Should the inspector find any issues with the home, this will allow an opportunity to revisit the selling price with the seller and seller’s agent to make sure you’re getting a fair deal based on the condition of the home.

Working with the Seller’s Agent

A quick summation of a buyer’s agent and seller’s agent: The buyer’s agent has a fiduciary duty (legally mandated obligations) to the home buyer, acting in their best interests, making sure their private information is confidential and accounting for all funds and documents in the home transaction.

A seller’s agent will have that same duty, except this will only apply to the seller of the home. For this reason, starting the home buying process without a buyer’s agent can be a big mistake.

Your buyer’s agent will represent you from the house-hunting process all the way to closing, making sure your best interests are protected. That’s why a home buyer working with a seller’s agent would be difficult. The seller is working to sell the home for the highest amount of money in the shortest amount of time, on behalf of the seller.

“The benefits of having a buyer’s agent are more than just having someone to let you in to the open house,” Gartley said. “They advocate on your behalf, on top of doing their research on the market.”

Additionally, should any issues arise during the inspection, the buyer’s agent will represent the home buyer and find a way to negotiate the best price for the home.

Not Planning for Closing Costs

As stated earlier, there are a lot more expenses that factor into the home buying process besides the down payment. On top of the additional expenses that go into buying a home (insurance, taxes) there are also closing costs for the home loan.

Closing costs are fees charged by the lender for services that must be performed in order to close your home, like the appraisal, title insurance, homeowners insurance and so forth.

“On average, closing costs amount to 2% – 5% of the purchase price, so don’t forget to factor them into your all-in budget,” advised Nelson. “The final amount varies depending on where you live and what type of home you’re buying, so it helps to do some research or talk to your real estate agent about what you can expect.

Preparing for closing costs is just a matter of carefully planning your budget for buying a home. Make sure you’re prepared to cover all costs that come with a mortgage.

Be Prepared

Buying your first home can seem overwhelming at first, but if you arm yourself with knowledge and take action now, you’ll dodge a lot of the common, avoidable mistakes most first-time home buyers make.

If you’re ready to start your journey, talk to a Home Loan Expert today about your goals for homeownership.

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This Post Has 2 Comments

  1. This is great information, I shared it on my social media and I had a friend state that one if not the largest mistakes first time home buyers make is not reviewing the previous owners taxes.

    1. Thanks for sharing, Kurtis! You definitely want to know what all the costs involved with your purchase will be including the taxes.

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