Want to buy a home? Don't make these blunders in the course of looking for one.
Whether you're new to house hunting or have done it before, you may find that it's a time-consuming process. And in today's housing market, it may be even more difficult than anticipated due to record low inventory. But if you avoid these missteps, you'll make your search go smoother, so steer clear of the following blunders at all costs.
1. Not setting a budget first
There's no point in spending time looking at homes you can't swing financially. But if you don't set a budget for buying a home, you might waste days or weeks looking at properties you can't afford. Rather than risk that, use a mortgage calculator to find a home price you think will work for you. Keep in mind that you shouldn't spend more than 30% of your take-home pay on monthly housing costs. That includes your mortgage payment, property tax bill, and homeowners insurance.
2. Only looking at detached homes
You may have your heart set on a standalone home. But in today's market, inventory is even more limited among starter homes, so you may have trouble finding a detached home that falls within your budget. On the other hand, if you're willing to look at townhouses, you may find that you're able to buy a place without overspending and still get a decent amount of square footage in the process. While townhouses have their drawbacks -- sharing at least one wall with another unit and having little to no outdoor space -- they can be a good way to snag a starter home. And remember, you can always upsize in a few years once the market opens up.
3. Not working with a real estate agent
Since just about everyone has internet access these days, there's nothing to stop you from browsing a real estate website and finding homes in your area to go look at. But if you work with a real estate agent, you may be able to conduct your search more efficiently. An agent might be able to schedule private showings so you're not limited to open houses when looking at homes. And tut they might learn of homes before they officially hit the market, giving you a chance to make an offer ahead of the masses. And remember, as a buyer, you don't pay a commission to use a real estate agent -- you only pay when you're the seller.
4. Having too lengthy a wish list
It's natural to want your new home to check off all the right boxes. But because inventory today is so limited, being picky could mean not being able to buy a place at all. Now, this doesn't mean you shouldn't come up with a list of a few must-haves. But if your list has 17 distinct items you won't budge on, you may end up spinning your wheels.
5. Limiting yourself to a single neighborhood
In the course of your house hunt, you may have your eyes on a certain neighborhood -- and there's nothing wrong with wanting to live in a specific area or aiming for a particular school district. But again, inventory is very limited these days, so if you refuse to expand your search outside of a three-mile radius, you may end up unsuccessful. Instead, look at nearby neighborhoods with comparable amenities and school districts -- and at least see if that opens the door to more buying opportunities.
The last thing you want to do is get frustrated during your home search and give up -- or buy a home you can't really afford in the absence of finding one that's more suitable for you. Avoid these mistakes, and you'll spare yourself a world of stress -- and hopefully get closer to buying a place of your own.
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