The Top 4 Mistakes Most Homebuyers Make and How to Avoid Them

No one likes making mistakes, especially when there's a lot on the line. Purchasing a home is one of the most important transactions you're ever likely to make, and you don't want to leave it to chance. 

Here are four mistakes buyers tend to make and how a skilled REALTOR® can guide you away from each one. 

1. Try to Predict the Market

"Time on the market is better than timing the market." Many home seekers attempt to predict the market by holding off on purchasing until house prices or mortgage rates decrease. However, these are factors that you can't control, and using them as reasons not to proceed could cost opportunity. 

"Buyers should avoid attempting to predict market trends and timing their purchases based on factors such as upcoming job reports and elections that could influence the housing market unpredictably," Elijah de la Campa, a Senior Economist from Redfin, said.

Instead of waiting on uncontrollable factors, continue to save to increase your buying power as you continue to search. Also, consider what criteria you can alter that might introduce more inventory to the search.

2. Shopping Beyond Your Means

Most homebuyers get excited when they get a preapproval letter. However, they often set the pre-approval amount as their budget. This is dangerous if you don't understand that the mortgage's monthly cost is more important than the amount the bank is willing to lend.   

"Focus on what monthly payment you can afford rather than fixating on the maximum loan amount you qualify for. Just because you can qualify for a $300,000 loan doesn’t mean you can comfortably handle the monthly payments that come with it along with your other financial obligations.” - Bankrate.

To avoid overspending, work with a Realtor who understands real estate finance. Before making an offer, they should review the finances with you and explore ways of structuring them to save you. 

RightWay Realtor®: Expect to be transparent with your financials. An agent is your representative in the sale and must be able to articulate your financials during negotiation. 

3. Missing out on Assistance Programs 

Planning for the expenses of owning a home requires thoughtful consideration and preparation - and cash! It's important to factor in closing costs, down payment expenses, inspection, and appraisal costs. Without the guidance of experts in this field, you may overlook valuable programs that could significantly benefit you. This scenario is more common than you might think. 

Realtor.com reports that 80% of new home buyers are eligible for down payment assistance; surprisingly, only 13% of home buyers utilize such programs. Talk to your lender and Realtor about programs like the NJHMFA, which offers up to $22,000 of down payment assistance to qualified buyers. 

RightWay Realtor Tip: If you already own property, you may qualify as a first-time homebuyer if you haven't purchased it in the last 4 years.

4. Doing it Alone 

If you're noticing a common thread throughout this article, it's the insertion of a Realtor into every sale. Many people wait until it's too late to seek the help of a buying agent, not realizing that it costs them nothing in many cases.

A good Realtor® does more than open doors; they position you to win. Realtors understand their markets; great agents know how to prepare you for its ebbs and flows. Realtors® are like barbers: sure, you can cut your hair, but wouldn't you leave it to someone who can see from all angles? 

Don’t let the potential pitfalls of the home search undermine your dreams of acquiring your ideal home. Nip those mistakes in the bud. Reach out to RightWay Realty today to put the weight of our extensive expertise behind your home search.