Buying a house can be very complicated and time-consuming, especially for the first time homebuyers. There are so many things to think of that when a crucial step is missed, the whole experience can be a disaster. Here are some common mistakes that you need to avoid when buying a house:
- House-hunting without getting pre-approved first
Many first time buyers are too excited to find their dream house that they forgot to get pre-approval for a mortgage first. The pre-approval letter will serve as your guide when choosing the house that you can afford. It is also a good way to convince the seller that you are financially qualified to buy the house based on your credit assessment by the bank.
- Not saving enough for the down payment
Your mortgage payment is not the only expenses that you need to be concerned about. You also need to have money to pay for the down payment. Normally, a minimum of 10 % of the home price is being asked for down payment. It can go up depending on several factors such as points and closing costs, inspection fees, insurance (property and mortgage) and property taxes. Just to be safe, you need to budget 15-20% of the total sales price for down payment.
3. Home Inspections
A home inspection is very important to assess the true value of the property. Take time to visit the house together with your real estate agent and a trusted inspector. They can help you determine the size of the property including the outdoor space. During house inspection, be nit-picky even with small details. Check for the parts that need re-construction, pipes with leaks, areas that are not cleaned, safety requirements that are not met, appliances that are not functioning, among others. Discuss the findings with the seller and check if you can haggle for price reduction depending on the repair costs that you will shoulder later on.
You think that not hiring a real estate agent can save you money, right? Not really. A Napa Valley realtor can be very helpful in a lot of ways. He can guide you in making smart decisions regarding loan application, asking price, strategic house-hunting, doing most of the legal documents, conduct house inspection, and so much more. If you don’t have any experience in buying a property, it is in your best interest to hire a professional realtor.