First Time Home Buyer Mistakes: 10 Tips to Avoid Homebuyers Remorse

by | Dec 19, 2020 | Buying A Home | 0 comments

First time home buyer mistakes can be shocking when you don’t know what you don’t know about buying your first home.  Avoid homebuyers remorse with these ten tips from realtor Sam Wilson of the Sam Wilson Home Selling Team for first time home buyers.

10 Tips to Avoid Homebuyers Remorse

  • Start saving early for a downpayment, closing costs, and moving expenses
  • Check your credit rating and pay off debt
  • Establish a pattern of consistent and stable employment
  • Talk to a mortgage lender to understand what you can afford and get pre-approved
  • Choose the right type of home to match your lifestyle
  • Hire the right realtor
  • Consider buying a fixer-upper
  • Understand the importance of a home inspection
  • Pay attention to the potential home resale value
  • Plan for the costs of homeownership in your budget

1 Saving Early for a Downpayment, Closing Costs, and Moving Expenses

When planning to buy your first home in the Denver metro area, decide how much money you can set aside each month for a downpayment, closing costs, and moving expenses. If you don’t know how much money you need to save, and you’re not ready to talk to a realtor or mortgage lender, make an appointment with an independent housing counselor who offers pre-purchase counseling.

The U.S. Department of Housing and Urban Development (HUD) has approved counselors who offer pre-purchase counseling and advice about the different types of mortgages. Some offer homebuyer education workshops. There are special programs for veterans and some first time home buyers. The best way to avoid first time homebuyers remorse is to become as educated as possible about the home buying process.

According to the Consumer Financial Protection Bureau, you need a downpayment of at least 3 percent of your target home price in most cases. Many loan types and lenders require five percent down or more. You can often save money if you put down at least 10 percent of the home price, and you’ll save the most if you put down at least 20 percent.

Estimate moving expenses by calling several moving companies and describing how many rooms of furniture is to be moved along with any unusual contents like a piano that may require special moving considerations. Self-packing or having a moving company pack your items also affects the cost.

2 Check Your Credit Rating and Pay Off Debt

Your credit score and information on a credit report determine the rate you pay for a mortgage and other types of personal loans. One of the most common first time home buyer mistakes is to apply for new credit cards or make further purchases on credit cards when getting ready to apply for a mortgage.

Increasing the amount that you owe on credit can negatively affect your credit score and increase your debt ratio, making it challenging to become pre-approved for the home of your dreams. As a potential first-time home buyer, you should check your credit reports and scores at least once a year to ensure that all of the information is accurate.

3 Establish a Pattern of Consistent and Stable Employment

Establishing a consistent and stable employment pattern can ensure that the pre-approval process for buying your first home goes smoothly. Most mortgage underwriters request at least two years of work history.

Mortgage lenders verify employment by contacting your employer and requesting documentation of current income. Lenders will request copies of your W-2, federal and state tax returns, and recent pay stubs. Stable employment and learning how to manage income within a monthly budget helps avoid homebuyers remorse when you understand the costs of buying a home, ongoing monthly expenses, and home maintenance costs.

It’s important to show proof of stable employment for at least two years with no employment gaps to be pre-approved and qualify for the best mortgage rates. If you are considering buying your first home, it’s best to wait to change jobs until you are approved, and your home closes.

If you hop from one job to the next, change career fields, or change jobs without a pay increase, this can raise red flags to lenders that your income may be too unsteady to pay a monthly mortgage consistently. When you are aware that your job position or pay structure may change during the time you are applying for a mortgage, be sure to advise the mortgage broker you are working with to avoid any unpleasant surprises.

4 Talk to a Mortgage Lender

Another of the most common home buyer mistakes is not talking to a mortgage lender before looking for homes. Knowing what you can afford and how becoming pre-approved for a loan works can reduce stress about finding the perfect house and being disappointed that the property is beyond your price range.

A mortgage pre-approval allows you to make an offer on a home that is within your budget. You will know your monthly payment and other related costs. A mortgage pre-approval also shows that you are a serious buyer with the ability to close on a home.

Many real estate agents require that homebuyers have a mortgage pre-approval lender from a reputable lender before looking at homes. If you don’t have a reputable mortgage lender, the Sam Wilson Home Selling Team works with various lenders and can make a recommendation.

5 Choose the Right Type of Home to Match Your Lifestyle

First time homebuyers remorseWhen thinking about buying a first home in the Denver metro area, it’s essential to look at options that include a condo, townhome, or a single-family home. How much time do you want to commit to maintenance projects—inside and out? Based on your lifestyle, how much space do you need? Are there onsite amenities like a clubhouse, a gym, and underground parking more suitable to your lifestyle?

If you are a single new home buyer, will you have time for outside home maintenance like lawn work and snow removal if you purchase a single-family home? If you are working and have limited time, buying a condo or a townhome may add fewer home maintenance projects to your list of to do’s.

Consider all of the options and the pluses and minuses. Condo and townhome owners are subject to the noise of next-door neighbors. Are you a single person moving next door to neighbors who have young children who may be noisy?

Regardless of the type of home, you choose, it’s best to investigate the neighborhood thoroughly. Visit the police station to request crime statistics. Visit the community on the weekend when you are likely to run into neighbors to ask about the neighborhood. If you are buying into a homeowners association, be sure to thoroughly read the annual minute meeting notes to avoid unpleasant surprises about assessments, repairs, or neighbor issues.

Sa Wilson, a knowledgeable realtor in Lakewood Colorado can educate you about the pros and cons of a condo, townhome, or single-family home to help you make the best decision. Avoiding first time home buyer mistakes includes avoiding choosing the wrong style of home to prevent first time homebuyers remorse and wanting or needing to sell again in a short period of time.

6 Hire the Right Realtor in the Denver Metro Area

Hiring the right realtor in the Denver metro area is the difference between being educated and represented or joining a pool of home buyers looking for a low rate commission deal and being neglected. Buying a home is a significant financial decision that can quickly become emotional when real estate events go wrong.

If hiring a low-commission realtor is your priority, know that you are one of many clients who will not receive a high level of education, attention, or time when negotiating a real estate deal or working out kinks in the real estate closing process. The commission rate you pay is directly related to the expertise, time, attention, negotiation, and problem-solving ability of the realtor you hire. Ask yourself if you really want to place your first time home buying experience in the hands of a low commission realty firm that won’t give you the time and attention you need.

Sam Wilson is a Knowledgeable Realtor in Lakewood Colorado

Finding the right house and making offers in the Denver metro area is one of the first areas where new home buyers benefit from working with knowledgeable realtors like the Sam Wilson Home Selling Team in Lakewood Colorado. Deals commonly fall apart when realtors—who lack negotiation skills—disappoint home buyers or home sellers by failing to negotiate and close a dollar gap between what a home buyer wants to pay and what a home seller wants to receive for a home.

Realtors who are excellent negotiators can educate home buyers and the real estate sellers’ agents on closing these gaps. Hiring the right realtor can make up for poor negotiation and selling skills on behalf of the realtor representing the other party.

In addition to having an offer accepted, the process to close a home has many areas where things can go wrong, including home inspections discussed in upcoming sections of these 10 tips for avoiding first time home buyer mistakes.

7 Consider a Fixer-Upper

Many first time home buyers will consider buying a fixer-upper or a home that needs repairs. Buying a home that needs repairs can be beneficial from many standpoints, including a lower initial price and a significant home appreciation value after repairs are made.

However, it’s financially critical to understand the cost of repairs, include these in a budget and understand which repairs have the most positive effect on the resale value of a home. Buying a fixer-upper is another area where knowledgeable realtors in Lakewood Colorado on the Sam Wilson Home Selling Team can offer significant value.

8 Understand the Importance of a Home Inspection

Getting a home inspection is one of the most important things all home buyers—new and experienced—can do to avoid costly financial shocks in the future. When buying a fixer-upper, home buyers can expect to have repairs.

However, knowing the type and extent of repairs can help make sure you have budgeted correctly for these needs. Minimizing surprises related to home repairs can minimize homebuyers remorse.

Click here to get a FREE home inspection checklist that you can print to avoid unexpected costs when buying or selling a home. Homebuyers and home sellers can save time and worry with this 12-step printable home inspection checklist.


9 Pay Attention to Home Resale Value

Avoiding first time homebuyers remorse is supported by thinking about selling a home while in the process of buying a home. A home is an investment that should grow in value. Real estate in the Denver metro area is an area of consistently increasing home values.

Questions to discuss with the Sam Wilson Home Selling Team:

  • Location, location, location. Is the neighborhood safe and walkable? Are you close to shopping, grocery stores, and medical care?
  • Is the home on a busy street or close to commercial properties?
  • If you are child-free, a school system may not be significant. However, the next person buying your home may have children. Consider the quality of the school district before you buy.
  • Is the community restrictive? Homeowners associations can be challenging. However, the consistency of things like the color of houses, land maintenance, and neighbors not parking a huge R.V. in their driveway may be beneficial long term.

10 Include the Costs of Home Ownership Into A Budget

Paying a monthly mortgage is only one of the costs of buying a home. A knowledgeable realtor, like Sam Wilson, recommends looking at monthly utility and other recurring bills to make sure that all home buyers are aware of the monthly costs of owning a home.

Budgeting money for annual upgrades and repairs is important to avoid homebuyers remorse. Ask these questions:

  • When were the last time the flooring or carpet was replaced and the walls painted?
  • How old are the appliances, the heating, and cooling system?
  • What is the age of the plumbing?
  • Is the exterior of the home in good repair?

Home owners know that repairs can be an ongoing concern. As a new home buyer, It’s best to be proactive and make financial plans to address potential issues that may occur due to the life of items in the home. Maintaining a home is one of the most important aspects of selling a home in the future.

Avoid First Time Home Buyer Mistakes in the Denver Metro Area

All new home buyers can avoid first-time home buyers mistakes and first-time homebuyers remorse in the Denver metro area when choosing a realtor like Sam Wilson who has the knowledge, experience, and negotiating skills. Learn more about what customers have to say about the Sam Wilson Home Selling Team. If you are thinking about buying or selling a home contact Sam Wilson today to learn more.

Search for your next home in Lakewood Colorado and the Denver Metro Area on this FREE easy-to-use Home Search Page.

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Are you thinking about buying a home in Lakewood Colorado, or the Denver Metro Area?  Get expert real estate advice when house hunting for homes for sale in Lakewood CO, Jefferson County, and the Denver metro area. Work with a buyer’s agent on the Sam Wilson Home Selling Team. If you are thinking of buying or selling a home, we make you a priority and share our expertise to make the home buying or selling process as stress-free as possible.

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The Sam Wilson Home Selling Team specializes in homes in Lakewood CO, and Jefferson County Colorado, including Arvada, Aspen Park, Conifer, Edgewater, Evergreen, Genesee, Golden, Idledale, Indian Hills, Ken Caryl, Kittredge, Lakeside, Lakewood, Littleton, Morrison, Mountain View, West Pleasant View, and Wheat Ridge.  

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