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First Time Home Buyer MISTAKES | 9 Mistakes First-Time Home Buyers Make | First Time Home Buyer Tips

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15:33   |   Aug 01, 2017

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First Time Home Buyer MISTAKES | 9 Mistakes First-Time Home Buyers Make | First Time Home Buyer Tips
First Time Home Buyer MISTAKES | 9 Mistakes First-Time Home Buyers Make | First Time Home Buyer Tips thumb First Time Home Buyer MISTAKES | 9 Mistakes First-Time Home Buyers Make | First Time Home Buyer Tips thumb First Time Home Buyer MISTAKES | 9 Mistakes First-Time Home Buyers Make | First Time Home Buyer Tips thumb

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  • Buying a home is an exciting time of your life.
  • And buying your first home is a great accomplishment.
  • But there are some things to be aware of so you don’t get buyer’s remorse.
  • How’s it going everyone, welcome to the video, my name is Matt Leighton and if this
  • is your first time here, be sure to subscribe so you always stay up to date on the latest
  • real estate video.
  • Today’s video is all about first time home buyers.
  • First time home buyers often get pulled in so many different directions on guidance from
  • parents, friends, neighbors, and others on how to best to go about their home search.
  • And because of all the noise out there, I thought it would be beneficial to you to come
  • up with a list of 9 first time home buyer mistakes that I’ve seen so that you can
  • avoid making these mistakes.
  • Let’s begin
  • — The first and biggest mistake that first-time home buyers are making is that looking before
  • you’re financially qualified.
  • This one is so important.
  • And I don’t know if all first time home buyers are getting together and saying, “OK,
  • we’re not going to get pre-qualified until we’re ready to write an offer”, because
  • it certainly feels that way sometimes.
  • There are a lot of mortgage calculators and sleek looking websites out there that you
  • can punch in your income and what you want your monthly mortgage to be and it will spit
  • out your budget, but that is the wrong way to go about getting pre-qualified.
  • You need to talk with a lender before you start looking at houses.
  • Why?
  • Why is this so important?
  • Because you don’t know what you can afford until you’ve been told what you can afford.
  • You don’t get to determine your budget.
  • That’s the lender’s responsibility.
  • You are setting yourself up to fail if you don’t talk with a lender.
  • You may think you an afford a $600,000 house in Arlington when in reality you can only
  • afford a $300,000 home in Woodbridge.
  • Listen I know you’re excited to see houses and I know you have your checklist, but that
  • is meaningless without financial qualification.
  • So go out there and talk with a local lender.
  • — The second mistake is looking for a unicorn — Speaking of your checklist, hopefully
  • you wrote it using a pencil and not a pen because you might need to make adjustments
  • on what you’re looking for.
  • Yeah, that home with a 2 car garage, fenced-in backyard, finished basement, with the open
  • kitchen that’s walkable to your favorite shops and restaurants does not exist.
  • It only exists in your mind.
  • And if it does exist in real life, it’s twice your budget.
  • Think about what’s most important to you and know that you’re not going to get everything.
  • The goal is to find a home that meets 75% of your criteria, and then it’s up to you
  • to make up that last 25%.
  • You are not living on HGTV.
  • There’s a lot more value in buying something outdated and slowly making it yours than only
  • considering homes with granite counters and stainless steel appliances.
  • — Mistake number three is Using the listing agent to represent you.
  • Let’s say you walk in to an open house, you decide you love the house and you want
  • to write an offer so you talk with the listing agent who’s at the open house and that agent
  • agrees to help you.
  • Who better to help you write the offer and facilitate the transaction, than the listing
  • agent who knows the home and can directly talk with the seller, right?
  • Wrong.
  • The listing agent’s best interests are in helping the seller get the most money in their
  • pocket.
  • Oh maybe you thought the agent would cut their commission if they represented both sides?
  • Maybe, maybe they cut it 1%.
  • But if the property is overpriced by 5%, are you really saving money?
  • And what happens when the deal goes sideways.
  • Do you think the listing agent is going to have your back?
  • This is probably the largest financially transaction that you’ve made in your life up until this
  • point.
  • Do you want someone that represents the other side's best interest, or your best interest?
  • You want someone in your corner to guide you and lead you with your best interests in mind.
  • You want a buyer’s agent.
  • Do your research and find a good buyer’s agent who’s an excellent negotiator.
  • If you’re in the D.C.
  • Metro area, you already know who to call.
  • And in your local area, just as you research homes, and mortgage companies, research and
  • find a great buyer’s agent.
  • — Mistake number four is Looking too much into online home values.
  • I’ve held hundreds of open houses.
  • I’ve interacted with thousands of people in the D.C.
  • Metro area and not one time has someone said, Hey I’m here from Zillow and I’m going
  • to walk the property to calculate the Zestimate.
  • It’s because it doesn’t happen.
  • Zillow never goes into properties.
  • How can they have an accurate pricing tool if they don’t step foot inside of a home?
  • Zillow even admits that their Zestimates are inaccurate.
  • Just to give you an idea, Zillow’s own CEO sold his home for 40% less than the estimated
  • value.
  • It’s almost comical when someone presents an offer and cites the Zestimate as the logic
  • behind the offer.
  • A better way to determine a home’s value is to study the market and look at what comparable
  • properties have sold for.
  • That’s it.
  • You don’t need a fancy algorithm.
  • — Mistake number five is Expecting the value of the home to increase.
  • Guys, it’s not all rainbows and unicorns.
  • The reality is that your home value might not increase after you purchase it.
  • It may even decrease.
  • You should purchase your home because it’s a smart financial move for you, it helps your
  • family, and it increases your quality of life.
  • And if the market, which by the way, you can’t control happens to go up during the time you
  • own the property, good for you.
  • However if your whole goal is to try to time the market and get in and get out at the exact
  • right times, you’re not going to win.
  • The truth hurts.
  • And if you’re disagreeing with this point, maybe you need to take a deeper look.
  • Look I’m not saying it’s OK to buy an overpriced home.
  • I’m not saying it’s OK to buy in a neighborhood that doesn’t see appreciation.
  • It’s more the mindset that you’re going to buy this home, live in it for 7 years,
  • have your first kid, then sell it for 10% more when you’re ready for your second kid.
  • It’s not going to be 75 degrees and sunny all the time.
  • Sure there are certain things you can do to increase the likelihood that your home will
  • increase in value.
  • But at the end of the day, this is your home, your well-being, your livelihood.
  • Make sure that your quality of life is what you are looking for first, because that’s
  • what’s most important, and if your home increases in value, even better.
  • — Mistake number six is Underestimating your expenses — Things like utilities and
  • extra unexpected repairs eat up a lot more than you initially think they would.
  • The general rule of thumb is to estimate about 1% of the purchase price of the home for yearly
  • maintenance, repairs, and major yard work.
  • There’s a saying that goes, Once you buy your house, things start breaking.
  • You should be saving and budgeting, anticipating that things are going to break.
  • There are hidden costs of owning a home and while you don’t need to know all the hidden
  • costs, you should budget for extra costs and expect the unexpected.
  • — Mistake number 7 is Feeling rushed.
  • This one is a tricky one and let me tell you what I mean.
  • Do not let anyone make you feel like you have to decide and make an offer before you're
  • ready.
  • If you’re rushed and you’re unsure of things, it’s inevitable that the end outcome
  • will not be a good one.
  • You may lose a house because you’ve taken the time to think it over and by the time
  • you’re ready, the house is off the market.
  • It’s easy to fall in love with a house, but there are other houses.
  • Now with that being said, if you are in a market where homes move fast and the market
  • is strong, you may need to re-consider your strategy.
  • It’s ok to take your time at first.
  • However, there is a difference between feeling rushed and dragging your feet.
  • If you consistently see that properties go under contract after the first weekend or
  • in a short period of time, it’s a sign that you need to strike quickly.
  • So take your time, learn about the market, get an idea of how fast things are moving,
  • so that when you are ready to move forward, you do it quickly and aggressively.
  • — Mistake number 8 is falling in love with the house.
  • We kind of touched on this earlier.
  • Only in rare circumstances will this be your forever house where it will immediately meet
  • all your needs now and forever.
  • Or if you’re like the rest of us, the house will be suitable for a few years then you’ll
  • move to the next house.
  • Now obviously everyone’s life is different.
  • This may be the house that you live in for the next 20 years.
  • And that’s fine.
  • I’m a big proponent of thinking and acting logically and rationally.
  • If you fall in love with the home before your write the offer, you’re going to overpay
  • for the house.
  • Or someone will outbid you and you’ll compare every future house to the house you lost,
  • and that’s not good.
  • It’s ok to love the house after you move in.
  • Don’t get attached to houses if they are on the open market.
  • They will disappear, they will go under contract, someone else will buy them.
  • But guess what, another house will come on the market.
  • And this one might even be better than the last one.
  • You only have so much energy.
  • Don’t waste it by falling in love with a fairy tale.
  • The time to celebrate and the time to fall in love is after settlement and after you’ve
  • moved into your new home.
  • — I am going to end my list of first-time homebuyer mistakes by touching on something
  • that might catch a few of you off guard.
  • Mistake number 9 thinking renting is throwing away money.
  • And the mistake that some first-time home buyers are making is that they are buying
  • a home.
  • Now I’m a salesperson.
  • My job is to sell homes.
  • But guess what, there are a lot of you out there that would be much better off not buying
  • right now.
  • It’s very simple.
  • Renting versus owning depends entirely on your own personal circumstances.
  • If you move around a lot?
  • You should probably rent.
  • If you have kids and want them in the same school, buying is probably a better route
  • to take.
  • Figure out your ‘Why’.
  • Why are you going to buy?
  • Decide if it’s right for you.
  • There are 2 additional items on this point.
  • First being is that if you look at long-term, many people end up with a much larger nest
  • egg via real estate investment.
  • And two is that many people who are at retirement age have the equity in their home that makes
  • up the largest portion of their wealth.
  • The lesson here is that purchasing long-term is probably the best financial decision to
  • make, with the caveat that purchasing right now, this instance because your brother told
  • you to, or because you want to make your parents proud may not be
  • the best plan.
  • And there’s nothing wrong with renting right now if it fits and is congruent with your
  • current situation.
  • Alright ladies and gentlemen there you have the 9 mistakes that first time home buyers
  • are making.
  • I hope that you’ve learned something.
  • If you found this video helpful go ahead and hit that thumbs up button and let me know
  • that you liked this video.
  • Thanks for watching.
  • Until next time, create a productive day.
  • Take care.

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First Time Home Buyer MISTAKES | 9 Mistakes First-Time Home Buyers Make | First Time Home Buyer Tips.

Real estate agent and Realtor Matt Leighton goes through 9 mistakes that first time home buyers are making when it comes to purchasing a house.

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9 First Time Home Buyer Mistakes | Tips for First Time Home Buyers

# - 1. Seeing houses before getting financial qualification
# - 2. Looking for a unicorn
# - 3. Using the listing agent to represent you
# - 4. Looking too much into the home's online value estimation
# - 5. Expecting your house to increase in value
# - 6. Underestimating your expenses
# - 7. Feeling rushed
# - 8. Falling in love with houses on the open market
# - 9. Fallacy that renting is throwing money away

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