Follow these tips if you want to avoid common first-time buyer pitfalls.

When buying a home for the first time, there are several common pitfalls you need to avoid to make the purchase smooth and stress-free. Here are my tips for how to avoid these pitfalls.

1. Budget for closing costs. In addition to saving for a down payment, you need to budget for the money to close your mortgage, which can be significant. Closing costs generally range from 2% to 5% of your loan amount. Feel free to shop around and compare prices for expenses like homeowners insurance, home inspections, title search, etc. You can also defray some of the costs by asking the seller to cover a portion of them. In a low inventory market, though, this can be a hindrance to getting your offer accepted.

2. Set aside a buffer to pay for what you’ll do to the home once you own it. This includes adding furnishings, updating fixtures, repainting, and any other improvement you plan on making.

3. Buy a larger home that you can grow into. It’s easy to look at properties that meet your current needs, but if you plan on starting a family or expanding your current one, it may be preferable to buy a larger home now. Consider your future wants and needs and whether the home you’re looking at will fit into the big picture.

4. Take advantage of negotiations. A lot can be up for negotiation during the home purchase, which can result in major savings. Are there any repairs discovered in the inspection you can get the seller to cover (either fully or as a credit adjustment)? Is the seller willing to pay any closing costs? If you’re in a high-inventory market (i.e., a buyer’s market), you may find that the seller is willing to bargain with you just to get their house off of the market.

5. Get an inspection after your offer has been accepted. The results will only tell you so much, though. Not all inspections test for things like radon, mold, or pests, so be sure you know what’s included in yours. Also, make sure your inspector can access every part of the home, including the roof and any crawl space. It’s advisable to attend and pay close attention to the inspection; don’t be afraid to ask your inspector to take a closer look at something or ask them questions. Don’t expect them to address whether you should buy the house or not, but they can answer questions specific to what you’re seeing. This way, you’ll have all the necessary information to help you make the best decision.

Before you close on the home, your lender will require you to buy homeowners insurance. As I said above, you should shop around for the best rates, but also be sure your policy includes more than just “If your house burns down…” coverage. Going with a less expensive policy is a trap many buyers fall into because that usually means fewer protections and more out-of-pocket costs if you file a claim. Additionally, flood damage isn’t covered in basic homeowners insurance, so if your home is in a flood zone, you’ll most likely need a separate flood policy.

As always, if you have questions about this or any other real estate topic don’t hesitate to reach out to me. I’d love to help you.