As a first time homebuyer, you’re taking a proactive step in the process by reading this article. You should feel excited and empowered. 

That’s a great start! It means you’re educating yourself on a process many homebuyers don’t understand.

In this blog post, you will learn from the mistakes of other homebuyers so you can make informed decisions. You will also feel more prepared for your homebuying journey.

I’ve used data from the American Home Buyer Report: 2024 Edition, published by Jamie Dunaway-Seale from Clever, as evidence for the top 5 homebuying mistakes. 

Let’s jump into it! 

Mistake #1: Not picking the right realtor.

That you’re planning to hire a realtor at all is a great decision! Give yourself a pat on the back. 

Hiring a realtor to represent you in a real estate transaction is a must, but not all realtors are created equal. 

Survey data shows that nearly 80% of prospective buyers plan to hire a realtor. Yet, 42% of buyers said that “their agent was less helpful than expected.” 54% said the realtors “care more about making a deal than their best interests.’”

Don’t be a part of this statistic of buyers! 

You should interview 3-5 realtors early in your homebuying journey. Come prepared for each interview. Do background research online, request referrals, and come up with questions to ask.

Realtor interviews are important because building your homebuying team starts with your realtor. Your realtor will recommend all other professionals you work with throughout the transaction. These professionals include everyone from lenders to handymen.

You must hire a realtor you trust who will have your best interest in mind. Buying a home will be one of the biggest decisions and purchases of your life. 

Mistake #2: Not budgeting for a home.

I know, I know. Numbers aren’t the most fun for many homebuyers. But budgeting is a crucial step to take early. That way, you can land a home you and your family can afford and enjoy for years.

Of the recent homebuyers surveyed by Clever, the most common regret was buying a home that required too much maintenance. “[28%] of home buyers say they were shocked at the cost and time needed to maintain their property.” 48% of homebuyers said affordability is a top priority. Yet, 77% of homebuyers compromised on affordability.

Remain calm. If you do your due diligence, you won’t make this mistake. Thorough preparation will give you confidence in your decisions.

Before you talk to your realtor about your budget and price range, you need to have your finances in order. 

Your realtor and lender can’t be the ones to tell you what you can and cannot afford. You make that decision. 

Start by understanding your financial picture today, including living expenses, debt, and savings. If you plan to save money or cash out investments in the future, you can estimate these values. But, do so in a way that is a worst-to-moderate-case scenario and not best-case. 

We want good surprises, like more money, rather than bad surprises, like less money. 

The first number you need to decide is the monthly living expense cost you are comfortable with. Also, pre-determine the highest monthly living expense cost you are willing to entertain.

Decide this now and stick to it when running the numbers on potential offers later. It’s okay to walk away.

The second number you need to determine is an estimate of how much money you have for a down payment on a home. Plan for a worst-to-moderate-case scenario for anything not currently in a savings account.  

The third number will require some homework and may be adjusted based on the property. You need a realistic estimate of the home’s costs. These include utilities, ongoing maintenance, and future costs. Once you have these, you’ll determine the monthly cost to pay or save for future payments. 

Include this amount in your monthly budget number. 

Once that is done, your realtor and lender can help you meet your budget. 

Mistake #3: Not writing a must-have and nice-to-have list.

Buying a home is an emotional decision for most homebuyers. But acting on pure emotion can lead to pretty irrational decisions. These decisions will land you with buyer’s remorse big time. 

Before looking at houses, write your must-have and nice-to-have list. If you are buying a home with a significant other, you should do this together. This process will help you decide what is best for you and communicate what you want.

Disclaimer: No house is perfect, and there will ALWAYS be compromises when purchasing a home.

It’s easy to get carried away on a sunny day at an open house. But you don’t want to overlook potential drawbacks or serious issues with a property. Having a list ready so you can check off boxes as you walk through the house will allow you to consider the facts, both good and bad. Then, you can determine the compromises you’d be willing to make if you move forward. 

Having a list and communicating with your realtor will help to see only properties you agree are a good fit. 

Mistake #4: Not picking the right neighborhood.

We’ve all heard it. Real estate is all about location, location, location. 

For homebuyers, location is not the only priority, but a significant one. Location can impact your daily life outside the home, whether in your yard or commuting to work. 

According to the survey, 19% of homeowners mentioned not liking their home’s location. Of those surveyed, 55% prioritized a good neighborhood, but 38% of them compromised.

When you buy a home, you’re buying into a community of neighbors and a specific coordinate on the world map. Neither of these can change.

So, you focus on location and only compromise if the location is a fit. 

This step requires feet on the street and some intuition. But afterward, you’ll be well served by doing this before making an offer on a home. 

First, test out the commute from the house in the morning and evening so you know how long it will take each day.

Next, walk around the neighborhood and look at the other homes. Note the level of upkeep, the noise level, and the behaviors of neighbors outside their homes. You might even meet some of them and get valuable information. 

By doing this, you’ll be able to catch red flags. 

Are there dogs barking throughout the day? 

Does the neighborhood feel safe? 

Do you hear a lot of road noise during rush hour traffic? 

Are there other families with children on your street? 

Do particular neighbors’ properties seem like an “eyesore” compared to others? 

On and on, you’ll gather information that will help you make compromises that you can live with for years. 

Mistake #5: Stop the scroll! 

Stop looking at listings after you’ve purchased your home. 

Listen, I love real estate of all kinds and locations, but even I will follow this advice. You’ve got to stop looking at homes online. Doing so is a one-way street to buyer’s remorse.  

We’ve all heard the grass isn’t always greener on the other side of the street. The same goes for home buying. 

Comparing your home to other homes on the market will always make you feel like you made the wrong decision. Often, the opposite is true.

During your few weeks to months of homebuying, you didn’t get to pick from every house that will ever be on the market. You only sew those houses that came on the market during your search window. Most of the time, you will not even have two houses that are great candidates to choose between at any given time.

At the end of the day, choosing a home comes down to whether or not it is the right house for you. There is a lot to homebuying, but you are way ahead of the curve by having read this post. By implementing these steps as a first time homebuyer, you will feel prepared and empowered. This work will lead to great decisions that avoid buyer’s remorse.