10 First-Time Homebuyer Mistakes to Avoid

Waiting for the Unicorn House

One of the most common new homebuyer mistakes is turning down a great house because it’s not perfect. It might sound defeatist to shop this way, but it will actually save you from a never-ending home search.

“Some buyers hold out for a home that checks every box, but in most cases, it doesn’t exist, and you can waste months waiting while prices or rates climb,” says real estate expert Jon Wade. “So if you’ve been holding off for perfection, revisit your list and decide what you’re willing to compromise on.”

Ignoring Your Budget

While budgeting, many buyers focus only on the monthly mortgage, but ignore other costs like taxes, insurance and upkeep — but those can really add up, so don’t forget to include all housing-related expenses in your budget. To help estimate, ask for recent utility bills and factor in long-term maintenance costs like roof repairs or HVAC replacement.

“It’s easy to stretch your budget when you’re emotionally invested, but doing so can lead to long-term financial stress,” says Wade. “If you’re already feeling the pinch, reassess your spending and look for ways to reduce costs.”

Focusing Only on the House, Not the Neighborhood

A beautiful home in the wrong area can make you miserable, so before committing to buying a home, spend time exploring the area, walking the neighborhood and talking to locals during different times of day.

“I’ve seen people fall in love with features inside the house and completely overlook the neighborhood,” says Wade. “You need to feel comfortable where you live, not just within your four walls.

Not Using a Professional Real Estate Agent

To cut costs, it can be tempting to go without a real estate agent. But, that can end up costing more in the long run, especially when it comes to negotiating a price and getting inside advice on nuances like neighborhoods and common property pitfalls in the area.

“First-time buyers are usually unfamiliar with the complexities of the home buying process and need a trusted advocate, someone who can offer expert advice, negotiate on their behalf, and guide them through every step of the transaction,” says Milicevic.

Not Knowing What Can and Can’t Be Changed

A common new homebuyer mistake is not understanding which aspects of a home can be changed and which cannot. For example, you can’t change the location of a home or move nearby major roads, so if those are deal-breakers for you, it’s important to recognize that no amount of renovation will fix them.

“On the other hand, many buyers are turned off by things that are purely cosmetic and easily fixable, like paint colors, flooring, cabinets or countertops,” says Milicevic. “These are relatively simple updates and shouldn’t deter you from purchasing a home with strong potential.”

Making Emotional Decisions

Create a list of must-haves and deal-breakers before you start shopping. That way, you won’t be tempted by a home that you get emotionally attached to, even if it doesn’t fit all of your current needs.

“Letting emotions lead can result in poor choices,” says Wade. “You might rush in, overpay or ignore warning signs. If you’ve gone down this road, take a step back and go over your checklist with your agent and make sure the home fits your actual needs.”

Not Getting Pre-Approved

Before you start your home search, get a pre-approval letter from your lender. That way you’ll understand your budget, plus the seller is more likely to take you seriously when you make an offer.

“Starting your home search without getting pre-approved is like shopping without knowing your budget,” says Wade. “It happens all the time because buyers are eager to see homes. If you’ve already started looking, hit pause and speak with a lender.”

Spending Your Whole Pre-Approval Budget

Just because you’re pre-approved for a certain loan amount doesn’t mean you should spend that much. Instead, be realistic and conservative when setting your budget.

“Lenders base approvals on formulas like your debt-to-income ratio and available assets, but they don’t consider your lifestyle, personal comfort level or long-term financial goals,” says Milicevic. “The amount you’re approved for is not the same as what you can comfortably afford.”

Skipping the Home Inspection

Some first-time homebuyers consider skipping the home inspection, especially during highly competitive markets like the post-COVID real estate boom. However, this is a risky move, especially for first-time buyers.

“Home inspectors know what to look for and can spot red flags that could turn into costly repairs down the road,” says Milicevic. “Skipping the inspection might save time in the short term, but it can lead to major regret, and expense, in the long run.”

Overreacting to the Home Inspection

On the flip side, another common mistake is seeing the home inspection report and thinking the house is doomed. Instead, work with your agent and the inspector to understand what’s truly concerning and what’s normal wear and tear.

“These reports can often look intimidating, even for homes that are in good condition,” says Milicevic. “It’s important to remember that every home, including brand-new construction, will have issues listed in an inspection report.”

About the Experts

• Jon Wade is a real estate expert, resort market professional and the Broker Owner at The Steamboat Group, a family-owned real estate firm in Colorado. He has been working in the industry since 2005.
• Luka Milicevic is a contractor/home builder, plus an avid DYIer and Real Estate agent in the Nashville, Tennessee, area.

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