11 Things First-Time Buyers Always Get Wrong About Buying A House

Emotion certainly plays a role in any home purchase. It’s impossible to divorce the financial aspects of purchasing a house from the reality that it will serve as your home base many years into the future. Your home is the space that will support many of life’s most important memories and experiences, and therefore, it’s naturally an emotionally charged place. But you can’t forget that this is the most important financial decision you’ll likely ever make, as well.

A home is a potent fiscal resource. It can act as leverage for lending opportunities later in life (through a reverse mortgage or even a secured personal loan of some kind), and it’s likely to increase in value year over year, too. Historically, the national average has increased by about 5% per year, meaning the longer you own your home, the more it’s likely to be worth it. The potential value addition will improve your ability to purchase a home later in life that better serves your needs — maybe a larger home as your family expands or a smaller one as you near retirement. So opting for a home that’s in an area likely to see growth can be beneficial. The property you ultimately purchase serves you in more ways than just as a place to live and grow into your lifestyle. Remembering that it’s a crucially crucial financial asset is essential.

Forgetting to explore the neighbourhood

House hunters looking to buy for the first time are often hyper-focused on the home itself. The layout and amenities that a home provides are some of the most important considerations when searching for a home that matches your needs. But the home isn’t the only point of focus, and this is something that first-timers often lose sight of as they scour the market.

In addition to the front yard, number of rooms, and square footage of the living room, a home is grounded in a particular location. While you can change just about anything about your home if you want to, your physical address is an immutable property that can’t be changed without picking up and moving somewhere new. As a result, it’s just as essential to explore the neighbourhood and surrounding features as it is to inspect the property. Looking for restaurants, grocery stores, and other businesses that you’ll frequent as a resident can give you a sense of the community’s general environment. It’s also a good idea to look into the local schools if you’re planning to have children (or have already started a family). Local sports teams, entertainment options, and even the people who live nearby will all temper the way that you interact with your environment and make use of the home.

Forgoing the home inspection

Unless you find yourself buying in an aggressively slanted seller’s market, there’s little need to skip the home inspection. In certain circumstances, this will come into play to close a competitive deal, but for most buyers, the inspection is something that can’t be overestimated. A professional will diligently walk the property and evaluate the home’s systems, structure, and individual features. The resulting report will illuminate any problem spots that should be addressed in the home. For instance, an inspector might find cracks in the floor or ageing insulation in the attic that might require (rather than benefit from) attention.

There are two things that buyers gain from the inspection report. First of all, with a home inspection contingency, buyers can renegotiate on price. If there’s a major leak in the kitchen, for instance, a buyer can leverage the information in the report to seek a price reduction to cover the cost of the repairs. Alternatively, buyers can ask sellers to handle repairs themselves before handing over the keys and closing the deal. At the most extreme end, if an inspection reveals significant trouble in the home, it can decide to walk away from the deal more manageable — and perhaps offer a path to getting any down payment already contributed returned.