Unless you are fortunate enough to be a first-time homebuyer that works in real estate, residential construction or interior design, purchasing a home can be a daunting process.
Of the missteps many first-time homebuyers make, they frequently fall under five common themes:
- Not taking the time to learn about various locations and features in a town.
- Underestimating the cost of construction, renovation or simple decorating projects.
- Not thinking about future space or floor plan needs.
- Letting emotion override logic.
- Forgetting that location is key.
Here's what you can do to avoid these common homebuyer mistakes.
1. Not Taking the Time to Learn About Various Locations and Features in a Town
Especially if you're moving from a different part of the country and you're unfamiliar with seasonal change in an area, take time to research how the area looks different between winter and summer. In May, your home may feel private with trees surrounding the lot, but come November, when all of the tree leaves are down, what you thought was a dense woodland can reveal a busy parkway.
Unless you have lived in the town that you're considering for a period of time, you will need to rely on your real estate agent, people you know and trust and your own investigation to determine what areas best suit you. Consider what is important to you, which may take a bit of time to determine if you have never consciously thought about it.
2. Underestimating the Cost of Construction, Renovation or Decorating Projects
When you're buying just about any home, you'll likely ask yourself, “What will I need to do to it to make it livable?” If the answer is anything other than, “Bring my toothbrush,” you'll want to bring in professionals to review your ideas and provide cost estimates, feasibility input and offer opinions on the wisdom of your ideas. A seasoned real estate agent can be particularly helpful in determining if any major changes would add value to the property, or just be for your own enjoyment.
3. Not Thinking About Future Space or Floor Plan Needs
While it is difficult to predict life changes, it may be wise to think through how any change within the next few years could impact your housing needs. Whether it is an expansion of the family, a medical need that will affect your ability to go upstairs or if you are entering a new chapter of any kind, give some thought and visualize what your space and physical needs might be or how they could change. Be sure you understand how the house will function with these possible changes, or acknowledge that you may need to change up your housing circumstances.
4. Letting Emotion Override Logic
Falling in love with the home that has the charming window boxes, romantic gardens and is decorated like a page out of Elle Decor may play on your emotions and influence your decision. Be sure to think through the basics, including whether the number of bedrooms and bathrooms works for you and if the layout meets your needs. Make a checklist of what is important in a home and be sure the property meets those needs, even if your heart is saying you have to have this home.
5. Forgetting That location is Key
When looking for the right home, don't just research neighborhoods in a single town, but expand to other nearby towns as well that may fit your needs. Consider each town carefully. What services does each town offer? How are the schools? Do they have the sorts of activities, organizations and geography that meet your interests? After all, you're not just buying a property, you're buying into a community.
Finally, be sure you are comparing apples to apples between towns. To do this, look at property taxes between towns – the differences may narrow the gap between what seems like an expensive purchase in one town versus another. When you're calculating your monthly carrying cost, mortgage payment, property taxes and operating expenses need to be added together to get the true number.
Buying your first home is an exciting – and often daunting – endeavor.
In addition to setting your budget, comparing neighborhoods and visiting properties, you'll likely also get a crash course in mortgages and home inspections, among other things. According to the National Association of Realtors' 2017 Home Buyer and Seller Generational Trends report, first-time buyers made up 35 percent of all homebuyers, up from 32 percent last year. U.S. News talked to seven first-time buyers from across the country to find out what they wish they'd known before jumping into the real estate market.Beware of wire transfer scams.
Beware of wire transfer scams.
Two hours before Shannyn Allan, founder of the blog Frugal Beautiful, was supposed to close on a home in San Antonio, she received a last-minute email with instructions on where to wire her down payment. Turns out, fraudsters had scraped her information from the title company and posed as the company when they emailed her instructions. She later discovered the fraud and spent weeks trying to get the banks to recover the funds so she could close. "I wish the title companies would have let me know what to watch out for with wire fraud, and advised me to do a cashier's check," she says.Don't skimp on upgrades.
Don't skimp on upgrades.
After freelance writer Leah Ingram and her husband built their first home in 1999 in New Hope, Pennsylvania, they immediately regretted choosing the smaller model with a lackluster kitchen and bathrooms. "A couple thousand dollars for those upgrades spread over a 30-year mortgage would not have been a hardship," she says. The couple also thought that buying on a cul-de-sac would ensure there were other kids nearby. There weren't, however, and they moved after seven years.Save extra money for closing costs.
Save extra money for closing costs.
Christine Cummings and her husband are in the process of buying a home in Somerville, Massachusetts. Cummings, who is VP of marketing at All Set, a mobile app that aims to connect homeowners with lawn service and house cleaning professionals, says she wishes she'd known how much to budget for closing costs. "There are all these little fees here and there adding up to the actual closing date, making the closing costs just a little harder to pay," she says. In addition to a down payment and closing costs, new homeowners should also budget for potential surprises such as a broken air conditioner and other maintenance costs.Check the sewer line.
Check the sewer line.
After buying a home in New Jersey in 2003, Kenneth O'Connor, founder of a YouTube channel on saving for college, discovered his single-family home had major sewer problems. "If there are large old trees on the path of the sewer line, you need to make sure the roots are not constricting the pipe and cracking it," he says. It used to be harder to detect sewer problems, but "now [a home inspector] can send a tiny camera down the sewer line to determine if it's safe," he explains, emphasizing the importance of not overlooking this step.Consider the school district.
Consider the school district.
When Ali Wenzke, founder of The Art of Happy Moving, and her husband bought a townhouse in Chicago, they didn't consider the school district because they didn't have kids yet. "When we sold our home four years later, we had three kids and their educations to consider," she says. "We moved because we needed the space, but we were lucky that we accidentally bought in a great school district." Even if you don't plan on having kids, she recommends investigating the school district for future resale value.Price out renovations in advance.
Price out renovations in advance.
After buying her first home in Atlanta, Kali Hawlk, founder of a marketing firm that specializes in working with financial advisors, wishes she'd factored in the cost of upgrading to double-pane windows. "I could never get the temperature downstairs above 65 degrees in winter because the entire back wall of the house was single-pane windows," she says. "I wish I had been aware of how expensive it would be to replace all of the house's single-paned windows with new ones," she explains. She thought upgrading the windows would be a simple fix, but it wound up costing around $10,000.Look beyond surface details.
Look beyond surface details.
Fancy fixtures and accent walls are nice, but some flipped homes mask bigger problems. "When we purchased our first home, we found out very quickly that aesthetically pleasing did not mean physically sound," says Dan Mackin, host of the Ditching 9 to 5 podcast. "Your inspector can't find things underneath the walls. Just because a flipped home is pretty doesn't always mean it's [of] better quality," Mackin says. His first home (a flip in Colorado) had so many problems, he moved out two years later and earned his real estate license so he could help others avoid the same issues.Read More
Kencel's deep roots in the worlds of interior design and historic preservation give her a unique perspective on every home, whether preparing their homes for sale or evaluating the strength of a home under consideration.
As a six-time national ballroom champion, Kencel is chair of the Greenwich Historical Society’s Landmark Recognition Program, a member of the First Selectman’s Economic Advisory Council, and board member of the Town’s public relations campaign, Think Greenwich.