Haste One of Many Pitfalls Facing First-Time Buyers
It was nearly 30 years ago. But Natalie Farina will always recall the goof she made when she bought her first home. She simply forgot to open the closet doors.
As she discovered when she moved in, the closets in the old traditional home were tiny. And Farina, who ultimately raised four children in the place, had to hire a contractor to build larger closets.
Farina, now a broker-associate for the Coldwell Banker chain, counsels her clients to be more cautious when they buy a first home. After all, Farina looked at just one property and might have made a much bigger mistake.
“I was just lucky. As it happened, I bought a home in a great neighborhood that was close to schools and a lot of other amenities,” Farina said.
Not all buyers who rush the process are as fortunate, said Carmen Aniello, a broker-associate for the Century 21 chain.
Though Aniello tried to stop one man from buying a home on a busy street, he did it anyway. Then, after he moved in, he developed a serious case of buyer’s remorse. Why had he rushed to buy? Because his apartment lease was about to expire.
Living with the noise and pollution of the roadway, the buyer is sorry he acted so hastily. Though the neighborhood market remains tight, he now wishes he’d waited for a home on a quiet street in the same community.
“Don’t make the mistake of buying what you don’t really want just because you need something right away,” Aniello said. It’s better to move into the home of a friend or family member temporarily.
In general, first-time buyers are now better educated than novices of the past, said Leo J. Berard, charter president of the National Assn. of Exclusive Buyer Agents. Yet even today some first-timers stumble because of haste.
“We have to slow down the process, making sure people realize the pros and cons of a property before they buy,” Berard said.
Here are five common mistakes committed by greenhorns:
Goof No. 1: Trying to graduate to homeownership without homework.
The single biggest barrier to buying any property, especially one that will gain value, is the failure to grasp the rather complicated home-buying process.
You don’t need a college degree in the subject, but Berard urges rookies to take advantage of a brief night class in the subject or a weekend seminar. In many cases, mortgage lenders, housing agencies and real estate firms provide such courses free of charge.
If you can’t take a class on the topic, Berard says you should get a tutorial lasting at least two to four hours at your real estate agent’s office before looking at homes.
Goof No. 2: Letting the thrill of buying blind you.
“Some first-time buyers are like little kids in a candy store with a dollar,” Berard said. “They’re so excited to buy that they want to move right away.”
Inexperience is one obvious problem. Unlike repeat buyers, who have learned from past errors, many novices overlook subtle flaws in a property, such as a floor plan that doesn’t quite work for a young family.
One reason a large number of first-timers are too easily satisfied is that they’ve been cooped up in a small apartment for several years. By comparison, any property with a family room and yard looks good.
“A lot of people are just very confused about what they’re seeking,” Aniello said.
Goof No. 3: Letting fear of interest rate hikes drive your decision.
Clearly, mortgage rates can fluctuate with little notice, making it tempting to act quickly before an attractive opportunity passes.
And an occasional mortgage lender will create a sense of urgency to close a loan quickly, contends Berard, who owns an independent realty company.
While first-time buyers are more responsive to the fear of losing a chance at a favorable mortgage rate, repeat buyers understand that the careful selection of a home is more critical than its financing.
Seasoned buyers know that even if they must buy a home with a mortgage bearing a higher-than-average interest rate, they’ll have the option of refinancing down the line when rates fall again. After all, many repeat buyers have already gone through the refinancing process a time or two.
Goof No. 4: Considering too few communities when you buy.
First-time buyers often cast too small a net in terms of location, said Aniello. A young person may be predisposed to the community where he grew up, for example, without considering alternatives in the region.
What too few beginning buyers grasp is that the average agent knows only the turf within a relatively small territory. As long as you work with that agent, you’re likely to see properties within a limited radius of the agent’s office.
Don’t be afraid to extend your reach and engage a different agent if you decide to make a purchase on the far side of town. Your original agent should be happy to refer you to someone outside her domain.
“You should find the right neighborhood first, then the home,” Aniello said.
Goof No. 5: Buying on the rebound after you lose out to another bidder.
For a first-time buyer, it can be a wrenching experience to lose out to another contender for the same property. If you lose out in a bidding war for a particular home, don’t buy too casually in the immediate aftermath. Warned Aniello: “Buying on the rebound could mean buying the wrong house.”
Distributed by Universal Press Syndicate.