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First Time Home Buyer MISTAKES | 9 Mistakes First-Time Home Buyers Make | First Time Home Buyer Tips - YouTube
Channel: Matt Leighton
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Buying a home is an exciting time of your
life.
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And buying your first home is a great accomplishment.
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But there are some things to be aware of so
you donât get buyerâs remorse.
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Howâs it going everyone, welcome to the
video, my name is Matt Leighton and if this
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is your first time here, be sure to subscribe
so you always stay up to date on the latest
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real estate video.
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Todayâs video is all about first time home
buyers.
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First time home buyers often get pulled in
so many different directions on guidance from
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parents, friends, neighbors, and others on
how to best to go about their home search.
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And because of all the noise out there, I
thought it would be beneficial to you to come
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up with a list of 9 first time home buyer
mistakes that Iâve seen so that you can
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avoid making these mistakes.
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Letâs begin
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â The first and biggest mistake that first-time
home buyers are making is that looking before
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youâre financially qualified.
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This one is so important.
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And I donât know if all first time home
buyers are getting together and saying, âOK,
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weâre not going to get pre-qualified until
weâre ready to write an offerâ, because
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it certainly feels that way sometimes.
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There are a lot of mortgage calculators and
sleek looking websites out there that you
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can punch in your income and what you want
your monthly mortgage to be and it will spit
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out your budget, but that is the wrong way
to go about getting pre-qualified.
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You need to talk with a lender before you
start looking at houses.
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Why?
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Why is this so important?
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Because you donât know what you can afford
until youâve been told what you can afford.
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You donât get to determine your budget.
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Thatâs the lenderâs responsibility.
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You are setting yourself up to fail if you
donât talk with a lender.
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You may think you an afford a $600,000 house
in Arlington when in reality you can only
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afford a $300,000 home in Woodbridge.
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Listen I know youâre excited to see houses
and I know you have your checklist, but that
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is meaningless without financial qualification.
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So go out there and talk with a local lender.
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â The second mistake is looking for a unicorn
â Speaking of your checklist, hopefully
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you wrote it using a pencil and not a pen
because you might need to make adjustments
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on what youâre looking for.
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Yeah, that home with a 2 car garage, fenced-in
backyard, finished basement, with the open
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kitchen thatâs walkable to your favorite
shops and restaurants does not exist.
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It only exists in your mind.
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And if it does exist in real life, itâs
twice your budget.
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Think about whatâs most important to you
and know that youâre not going to get everything.
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The goal is to find a home that meets 75%
of your criteria, and then itâs up to you
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to make up that last 25%.
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You are not living on HGTV.
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Thereâs a lot more value in buying something
outdated and slowly making it yours than only
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considering homes with granite counters and
stainless steel appliances.
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â Mistake number three is Using the listing
agent to represent you.
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Letâs say you walk in to an open house,
you decide you love the house and you want
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to write an offer so you talk with the listing
agent whoâs at the open house and that agent
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agrees to help you.
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Who better to help you write the offer and
facilitate the transaction, than the listing
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agent who knows the home and can directly
talk with the seller, right?
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Wrong.
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The listing agentâs best interests are in
helping the seller get the most money in their
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pocket.
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Oh maybe you thought the agent would cut their
commission if they represented both sides?
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Maybe, maybe they cut it 1%.
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But if the property is overpriced by 5%, are
you really saving money?
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And what happens when the deal goes sideways.
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Do you think the listing agent is going to
have your back?
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This is probably the largest financially transaction
that youâve made in your life up until this
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point.
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Do you want someone that represents the other
side's best interest, or your best interest?
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You want someone in your corner to guide you
and lead you with your best interests in mind.
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You want a buyerâs agent.
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Do your research and find a good buyerâs
agent whoâs an excellent negotiator.
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If youâre in the D.C.
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Metro area, you already know who to call.
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And in your local area, just as you research
homes, and mortgage companies, research and
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find a great buyerâs agent.
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â Mistake number four is Looking too much
into online home values.
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Iâve held hundreds of open houses.
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Iâve interacted with thousands of people
in the D.C.
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Metro area and not one time has someone said,
Hey Iâm here from Zillow and Iâm going
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to walk the property to calculate the Zestimate.
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Itâs because it doesnât happen.
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Zillow never goes into properties.
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How can they have an accurate pricing tool
if they donât step foot inside of a home?
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Zillow even admits that their Zestimates are
inaccurate.
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Just to give you an idea, Zillowâs own CEO
sold his home for 40% less than the estimated
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value.
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Itâs almost comical when someone presents
an offer and cites the Zestimate as the logic
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behind the offer.
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A better way to determine a homeâs value
is to study the market and look at what comparable
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properties have sold for.
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Thatâs it.
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You donât need a fancy algorithm.
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â Mistake number five is Expecting the value
of the home to increase.
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Guys, itâs not all rainbows and unicorns.
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The reality is that your home value might
not increase after you purchase it.
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It may even decrease.
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You should purchase your home because itâs
a smart financial move for you, it helps your
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family, and it increases your quality of life.
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And if the market, which by the way, you canât
control happens to go up during the time you
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own the property, good for you.
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However if your whole goal is to try to time
the market and get in and get out at the exact
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right times, youâre not going to win.
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The truth hurts.
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And if youâre disagreeing with this point,
maybe you need to take a deeper look.
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Look Iâm not saying itâs OK to buy an
overpriced home.
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Iâm not saying itâs OK to buy in a neighborhood
that doesnât see appreciation.
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Itâs more the mindset that youâre going
to buy this home, live in it for 7 years,
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have your first kid, then sell it for 10%
more when youâre ready for your second kid.
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Itâs not going to be 75 degrees and sunny
all the time.
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Sure there are certain things you can do to
increase the likelihood that your home will
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increase in value.
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But at the end of the day, this is your home,
your well-being, your livelihood.
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Make sure that your quality of life is what
you are looking for first, because thatâs
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whatâs most important, and if your home
increases in value, even better.
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â Mistake number six is Underestimating
your expenses â Things like utilities and
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extra unexpected repairs eat up a lot more
than you initially think they would.
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The general rule of thumb is to estimate about
1% of the purchase price of the home for yearly
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maintenance, repairs, and major yard work.
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Thereâs a saying that goes, Once you buy
your house, things start breaking.
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You should be saving and budgeting, anticipating
that things are going to break.
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There are hidden costs of owning a home and
while you donât need to know all the hidden
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costs, you should budget for extra costs and
expect the unexpected.
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â Mistake number 7 is Feeling rushed.
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This one is a tricky one and let me tell you
what I mean.
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Do not let anyone make you feel like you have
to decide and make an offer before you're
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ready.
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If youâre rushed and youâre unsure of
things, itâs inevitable that the end outcome
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will not be a good one.
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You may lose a house because youâve taken
the time to think it over and by the time
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youâre ready, the house is off the market.
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Itâs easy to fall in love with a house,
but there are other houses.
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Now with that being said, if you are in a
market where homes move fast and the market
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is strong, you may need to re-consider your
strategy.
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Itâs ok to take your time at first.
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However, there is a difference between feeling
rushed and dragging your feet.
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If you consistently see that properties go
under contract after the first weekend or
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in a short period of time, itâs a sign that
you need to strike quickly.
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So take your time, learn about the market,
get an idea of how fast things are moving,
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so that when you are ready to move forward,
you do it quickly and aggressively.
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â Mistake number 8 is falling in love with
the house.
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We kind of touched on this earlier.
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Only in rare circumstances will this be your
forever house where it will immediately meet
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all your needs now and forever.
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Or if youâre like the rest of us, the house
will be suitable for a few years then youâll
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move to the next house.
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Now obviously everyoneâs life is different.
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This may be the house that you live in for
the next 20 years.
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And thatâs fine.
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Iâm a big proponent of thinking and acting
logically and rationally.
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If you fall in love with the home before your
write the offer, youâre going to overpay
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for the house.
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Or someone will outbid you and youâll compare
every future house to the house you lost,
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and thatâs not good.
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Itâs ok to love the house after you move
in.
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Donât get attached to houses if they are
on the open market.
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They will disappear, they will go under contract,
someone else will buy them.
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But guess what, another house will come on
the market.
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And this one might even be better than the
last one.
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You only have so much energy.
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Donât waste it by falling in love with a
fairy tale.
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The time to celebrate and the time to fall
in love is after settlement and after youâve
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moved into your new home.
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â I am going to end my list of first-time
homebuyer mistakes by touching on something
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that might catch a few of you off guard.
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Mistake number 9 thinking renting is throwing
away money.
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And the mistake that some first-time home
buyers are making is that they are buying
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a home.
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Now Iâm a salesperson.
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My job is to sell homes.
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But guess what, there are a lot of you out
there that would be much better off not buying
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right now.
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Itâs very simple.
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Renting versus owning depends entirely on
your own personal circumstances.
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If you move around a lot?
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You should probably rent.
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If you have kids and want them in the same
school, buying is probably a better route
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to take.
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Figure out your âWhyâ.
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Why are you going to buy?
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Decide if itâs right for you.
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There are 2 additional items on this point.
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First being is that if you look at long-term,
many people end up with a much larger nest
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egg via real estate investment.
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And two is that many people who are at retirement
age have the equity in their home that makes
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up the largest portion of their wealth.
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The lesson here is that purchasing long-term
is probably the best financial decision to
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make, with the caveat that purchasing right
now, this instance because your brother told
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you to, or because you want to make your parents
proud may not be
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the best plan.
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And thereâs nothing wrong with renting right
now if it fits and is congruent with your
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current situation.
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Alright ladies and gentlemen there you have
the 9 mistakes that first time home buyers
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are making.
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I hope that youâve learned something.
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If you found this video helpful go ahead and
hit that thumbs up button and let me know
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that you liked this video.
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Thanks for watching.
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Until next time, create a productive day.
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Take care.
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