Top Five Emotional Mistakes First-Time Homebuyers Make
Everyone makes mistakes, especially first-time homebuyers. It’s very helpful to learn about the mistakes that other people commonly make. If you know where other folks have stumbled, you’ll be on the lookout—and can avoid the same potholes.
Here are the top five emotional mistakes that first-time homebuyers often make.
1. Falling in Love With a House
Buying a home is an incredibly emotional experience for many people, much more so than other financial investments. That’s because we’re choosing the place we’re going to call home. It should be safe and secure, and in some way it should touch your emotional core.
The process calls on us to reconcile our dreams with the realities of our checkbooks, so it also plays on our emotions. Once emotions are involved, it’s difficult to inject the distance you need to make an objective choice.
Can you fall in love with a house? Certainly. You also may be encouraged down that path by a real estate agent who says things like, “Oh, this house was meant for you,” “It really suits you,” and “I can tell this is the perfect house for you. Don’t you just love it?”
You have to remember that love fades. After a while, you’ll start to see the flaws every home has. Nothing’s perfect, and if you haven’t based your choice on what you actually need, you may find yourself owning the wrong home.
2. Losing Control of Your Purchase
This can happen in several ways. You may hire an assertive agent who puts you where he or she thinks you should be, which may or may not be where you actually want to live. Or perhaps your parents step in with a check and their two cents. Or your children require more of the time you set aside as home-scouting time. Whichever way it happens, losing control of the home-buying process can result in errors that may damage the end result.
For example, if you and your spouse or partner want to be in a particular school district in time for the fall semester and you let the spring slip away, you could wind up having to transfer your children mid-semester.
Another way of losing control happens when you allow personality clashes (between yourself and the real estate agent, mortgage broker or professional home inspector) to get the best of you. Remain focused on the goal: a successful closing and moving into your new home.
3. Being Indecisive
Do you want to buy a house? Or do you want to start your own business? Or do you want to take a six-month sabbatical and travel the world?
Buying a home means making plenty of tough decisions about budgets, neighborhoods and what you want in a house. Then you must reconcile your choices with those of your spouse or partner. If you’re indecisive about what you want and where you want it, it may indicate that you’re not ready to make the emotional commitment to home ownership.
If you’re simply worried that the minute after you make your offer, a better house at a better price will come along, remember this: There’s more than one right house for you. There are countless anecdotes of people bidding on homes, losing them and then finding a home that’s a better choice the next time out. Still, at some point, you’ll have to make an offer or withdraw from the process.
Of course, once you start looking for a home, your indecision may mean you’ll lose a few homes before you decide you’re really going to do what it takes to buy a home.
4. Underestimating the Responsibilities of Ownership
Renting is easy. You write one check a month, and the landlord is supposed to take care of the rest. Owning a home is more complicated, and the responsibilities of home ownership can weigh heavily.
Here are some of the things you must do if you’re a homeowner:
You must remember to pay your mortgage, assessments (if any) and real estate taxes.
If your tax bill seems unreasonably high in comparison to those your neighbors receive, you should fight with the tax collector to lower it. You should buy enough hazard insurance to protect yourself against loss or damage to your house and its belongings (underinsuring a home is one of the biggest mistakes homebuyers make).
If you don’t keep your house and landscaping in top condition, your home may not appreciate in value as quickly as others.
You should fight city hall for necessary street and sidewalk improvements and against unnecessary ones. You should work hard to be a good neighbor and improve the neighborhood.
Yes, buying a home means you get to paint the walls any color you like. But if you’re not prepared for the responsibilities—which may mean you’ll have to spend the weekend puttering around the back yard, instead of putting on the green—you may have bought before your time.
5. Buying a Home Before You’re Really Ready
Owning a home isn’t for everyone, and the savvy potential homebuyer will recognize that he or she isn’t really ready for the commitment.
How do you know whether you’re ready to buy a home? It’s different for everyone. If you find you’re resisting any one particular path, you’re probably trying to do something you’re not ready for.
Do your homework to give yourself a base of knowledge and comfort. For example, if you find yourself overwhelmed by the thought of choosing a neighborhood, start exploring areas slowly, one by one.
Or if you’re concerned about being able to afford a home, sit down and work out a budget. You might find that you’re living more cheaply than you could if you owned, although without the long-term financial benefits.
If you’re concerned that your quality of life will be compromised by a move, spend some time figuring out how you’ll get to and from your job and what kind of time it will take. If you’ll add two hours to your commute each day, you indeed may be better off renting until you can afford a home closer to your job.
Buying a home before you’re really ready almost certainly will result in a heavy-duty case of buyer’s remorse. That’s the sinking feeling you get in the pit of your stomach when you’ve committed yourself beyond your financial or emotional resources. When you buy the right home at the right time, for the right amount of money, you won’t have buyer’s remorse. Instead, you’ll have the pleasure of looking forward to your move as an exciting challenge, rather than dreading it.
If you can’t figure out why the thought of moving gives you the jitters, consult a professional. Talk things over with your financial counselor, your real estate agent and your mortgage professional.
Remember that millions of first-time buyers have stood in your shoes and taken the steps that you’re about to take. About 2 million first-time buyers successfully walk the path to home ownership every year in the United States. It is a path well-worn, with signposts along the way. You won’t get lost. All you have to do is take it one step at a time.