Shopping for our first home?

Shopping for your first home?

By Erik J. Martin CTW Features

It’s no surprise that first-time homebuyers are often eager and excited to zoom through the purchasing process and claim their first property. The problem is that fervor, coupled with a lack of experience, can lead to mistakes, resulting in buyer’s remorse. But with the right approach and prepara tion, you can avoid common errors and sleep better at night, knowing you’ve completed the transaction with proper due diligence. Porch recently polled homeown ers who bought in the last year and found that first-timers were over three times more likely to feel unprepared purchasing a home than repeat buyers. They were also more apt to find their properties via word-of-mouth, for-sale signs, newspaper home listings, and family and friend recommendations than they were to consult real estate agents and online home listings. Among all buyers, nearly 49% committed to a mortgage with a lender they were already bank ing at; three in four confessed that they didn’t completely understand the terms they were signing, and almost 37% didn’t fully comprehend their home owners’ insurance policy or read that policy fully. “I was also surprised to see that, roughly, only 22% of buyers shop around for the best financ ing option. Instead, most people choose to finance their homes through their primary lender,

Avoid these mistakes when searching

which isn’t always advisable,” explains Matt Ehrlichman, CEO of Porch.com based in Seattle. “It was also interest ing to find that 80% of buyers didn’t even seek mortgage advice from a financial advisor; instead, most looked to their families for input and how to approach a mortgage.” Ben Heller, real estate litiga tion attorney for Los Angelesheadquartered Schorr Law, says first-time buyers make blunders a lot more often than you think. “Almost every day, our firm receives calls from a first-time home buyer who may have made a mistake during the home shopping and purchase process,” says Heller. “Often, the buyer was overwhelmed during the transaction and didn’t get the proper representa tion.” Geoffrey Zureikat, a principal broker with Compass Real Estate in Chicago, says it’s somewhat normal and under standable for slipups to occur, although they can be costly and regrettable. “Buying a home is usually the biggest financial decision many make in their lifetime, so inher ently, there will be some anxiety, and feeling stressed can lead to bad decisions,” Zureikat says. Joshlyn Ross, a home buying consultant with Houston-based Real Estate Prep LLC, points to other common faults first-timers make. “Many blindly agree to work with the experts that their real estate agent suggests without doing their homework. They don’t invest in the knowledge needed to buy and maintain a home. As a result, they don’t understand the various nu ances that go into the purchase process and aren’t fully prepared financially for the transition from renter to owner, either,” says Ross. One particular area of concern is that first-timers tend to trust family and friends more than an experienced real estate agent with whom they may not have as close of a relationship. “This misconception that an agent who works on commission may not have your best interests in mind is problem atic. And this mistake becomes generational – getting handed down from other buyers who are not experts or not up to speed with the evolving market like a skilled agent is,” notes Ehrlichman. It’s also predictable that many will opt to get a mortgage at the bank they are already us ing: commonly a convenience decision. “But it’s best to take the time to shop around, speak with at least three lenders, and compare the terms, processes, and local references they share carefully,” Ehrlichman suggests. Too many inexperienced buyers also execute their purchase and sales agreement without fully understanding the legal effect of that contract. “That agreement often contains dozens, if not hundreds, of terms and conditions that are easy to gloss over. But the buyer should read it in full and ask the necessary questions to understand each provision and if in doubt, consult with an at torney,” recommends Heller. When it comes to a homeown ers’ insurance policy, it pays to parse through it carefully. “Many of my buyers trust what their insurance expert says without fully understanding the fine print. Read through it thoroughly, ask questions about anything you don’t understand, and know what you’re paying and covered for,” Zureikat says. Consider investing in real estate educational classes and programs, too – especially if your lender or real estate agency offers them at no charge. “It’s important to invest in your home-buying journey and learn as much as you can,” suggests Ross.

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