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Common Pitfalls of the First Time Homebuyer

Becoming a homeowner for the first time can be exciting, overwhelming and a bit scary. You search and search in hopes of finding your dream home. Seems simple, but often times first time homebuyers make mistakes that can turn their dream into a nightmare. If you are gearing up to buy your first home, arm yourself with these tips to avoid costly mistakes that could leave you renting instead of owning. According to the real estate websites www.zillow.com and www.realtor.com, here are some of the most common mistakes made by first time homebuyers: 

Not knowing what you can afford. Falling in love with a house that is outside of your price range can put you in the dangerous position of trying to stretch and buy something you cannot afford. If you haven't already done so, sit down a make a list of all your expenses (excluding rent). Be sure to include major expenses, such as insurance premiums or annual vacations, which only occur once a year. Once you have created a thorough budget, you will know how much you can spend on your new home each month. 

Failing to consider additional expenses. Often times first time homebuyers will overlook costly expenses associated with owning a home that may not be included in their monthly payments. In addition to your monthly mortgage payment, you will be responsible for many things you were not responsible for when you were a renter. For example, you will be obligated to pay property taxes, property insurance and any monthly maintenance fees required by your community association. 

Being too picky. Like most homebuyers, I am sure you have a list. Making a list can be very helpful, but don't be so inflexible that you look past your dream home over something that can easily be fixed. Compromising is a reality for many first time homebuyers because funds are limited.

Being swept away. Staging, minor upgrades and quick fixes are a seller's way of playing on your emotions and reaching deeper in your pockets. Staging and other cosmetic upgrades could wind up costing you much more than expected. Finding a home where value can be added ensures a bump in equity to help you up the property value later.

Compromising on the important things. Have a core list of requirements that you do not compromise on. For example, if you plan on having kids, don't buy the two-bedroom home when you will need three bedrooms. Make a short list of things that are must haves and don't compromise on those. 

Neglecting to inspect. You don't want to get stuck in a money pit when you are already on a budget. Take the time and budget for a home inspection when purchasing a home. Try not to get attached to the home until you see the inspection report. This will give you a full physical report of the property and ensure you are making a sound investment. 

Not choosing to hire an agent or using the seller's agent. One agent who is working both sides of a deal is held to the ethical rule that they must act in both the seller's and the buyer's best interests, but you can see how that might not work in your best interest. Before starting your home search, find an agent who will walk you through the process and act in your best interest. 

Not thinking about the future.  Accurately, predicting the future is impossible, but paying attention to the information available to you now and asking questions can help you avoid unwanted surprises. Ask about the neighborhood and also any future development in the area. 

Buying a home for the first time should be exciting, not overwhelming or scary. Be prepared. If you take time, plan, and do your research, you can protect you and your family from costly mistakes. 

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