5 Most Common Mistakes of First Time Buyers

A lot more people than ever before are looking at buying real estate, whether for personal use or as an investment opportunity. Yet there are many first time buyers who are inexperienced in real estate matters that fall victim to the pitfalls and problems that can occur when buying property for the first time.

One of the first pitfalls that first time buyers often fall into is not acquiring the pre-approval for their mortgage. A lot of people ignore the fact that getting pre-approved for a mortgage is important before you start to seriously look at buying a property. Getting pre-approved for a mortgage is crucial in letting you know the type of real estate that you can afford before you start looking at real estate and putting in offers that you cannot afford. The pre-approval comes as a written statement from the bank or financial institution where they state just how much you have been approved for and how much the interest charged on the loan. On top of which, with this pre-approval statement, you have a far better chance of having your offer accepted by the seller as it gives your offer much needed credibility.

Another of the errors that new buyers often make is to neglect the importance of making sure that the property that they are interested in buying has been fully inspected. Considering that you are paying out a considerably large amount of money, there is no reason why you should neglect the importance of the inspection. When you have the property inspected you will be making sure that the home is not hiding some unexpected structural problems, problems that you will be responsible for after you have completed the purchase. With an inspection, you are making sure that there are not going to be any nasty surprises once you have completed the purchase, plus you will be able to tell if the seller is overpricing the property or not.

An additional mistake that first time buyers make is to spend more money than they realistically have at their disposal. It is all very well finding the home of your dreams; you also need to be realistic about whether you can actually afford the property, or whether you are going to be overstretching your finances. You may think that you can in actual fact afford the property, however, you do not know what problems may arise after you have completed the purchase that will put a dent in to your monthly budget. By over stretching finances, there is a chance that the buyer will not be able to meet their monthly financial commitment and they will then risk losing their home.

Real estate is certainly a good investment opportunity right now; however, for those people who have no experience in buying property, there are certainly a number of pitfalls that need to be avoided. Otherwise the chances of making money on your investment is going to reduce with each mistake you make.