First-time home buyers often feel overwhelmed. The following list of common first-time buyer errors can help you spot pitfalls before it’s too late. It will be beneficial to understand what you should do before purchasing a residential property to avoid common missteps.
Handling the Purchase Alone
Purchasing your first house is a big deal. It is a significant financial transaction and has deep emotional implications as well. This is the place that will protect and shelter your loved ones. Thus, it is important to protect yourself by working with a real estate lawyer, who will make sure that you steer clear of any potential missteps.
Under Maryland state law, it is not necessary for parties to hire an attorney to help them in their residential real estate deals, including with respect to the closing process. However, an experienced Maryland residential real estate attorney can be invaluable in helping to address your questions, concerns, issues, and problems, as well as identify any potential problems before or during the settlement or closing process.
Seasoned residential real estate lawyers handle countless closings and have the knowledge base that only a certain kind of volume, scope, and exposure can develop. Further, a skilled attorney will be ready and willing to undertake all legal services necessary to buy or refinance a private property, both for sellers and buyers alike. In addition, a lawyer would be aware of the competitive marketplace and the availability of alternative sources of legal help available.
Assuming You Need Minimum 20% Down Payment to Buy
A common mortgage myth is that you need to put a twenty percent down payment on a residential property to own one. In fact, most home buyers do not put down a down payment that large.
There are various mortgage programs for first-time buyers, and most of them do not necessitate a twenty percent down payment. The most common loan programs include USDA, VA, FHA, and conventional home mortgages. Notably, when you put less than twenty percent down in a conventional mortgage program, you will need to purchase private mortgage insurance, which will add to your monthly housing payment.
Failure to Undertake Due Diligence
It can be an enjoyable experience looking at homes. At times, buyers erroneously get distracted by the glitz of a specific property. The “shiny object” appears so tempting that other potentially vital elements are disregarded. Very often, these issues include external aspects that could contribute adversely towards the appeal of a property.
You are responsible for undertaking due diligence as the final purchasing decision falls on your shoulders. Due diligence includes performing adequate research about the property and the locality to make sure you do not miss any red flags. Making a list of the things to inspect is a good idea. You could review whether permits were taken out for improvements and check the sex offender registry, among other tasks before you hand over the money.
Not Accounting for the Total Cost of Purchasing a Property
Many other costs, besides the actual purchase price, are associated with buying a home. Most often, closing costs are the costs that take first-time buyers by surprise. The miscellaneous fees necessary to complete the transaction can add up to two to five percent of the total purchase price.
When purchasing a home, look into a summary of all associated costs. You do not want any surprises, particularly as a first-time homebuyer. Speak to all parties involved that may charge you fees to understand what you are facing, such as your lender, your agent, the insurance provider, and the title company.
Focusing Only on the Home
The locality where the home is situated in is arguably just as crucial as the actual property. Many first-time buyers fail to account for the area as they are so fixated on the home, which is not a good idea. There are various factors pertaining to the location that will significantly impact your experience living there, including the traffic, public transport options, crime rate, amenities, school systems, and more.
Work with Experienced Real Estate Attorneys for a Successful Home Purchase Transaction
A successful home buying transaction involves the right location, meticulous financial planning, a deep understanding of the market, and a committed support team. We at Evans Law have decades of experience and can help create a seamless process for you as a first-time buyer. Call (410) 626-6009 today to speak to an established real estate attorney.