Moving into a new home is an exciting time for many people.

There are so many things to do and decisions to make, it can be easy to get overwhelmed.

However, you don’t want this process to turn sour because of a few mistakes that could have been avoided.

I’ve compiled 7 common first time home buyer mistakes that we see happen over and over again in the real estate market – from spending more than you can afford, not considering location, not talking to the banks to get a good deal all the way down to making sure you’re ready with keys in hand before signing on the dotted line!

1. Buying a home that is out of your budget

The first time home buyer mistake that is most often made, unfortunately for some home buyers, is buying a home they really cannot afford.

Most people rely on the bank’s opinion of affordability when looking at homes, but this information may not be accurate for everyone.

2. Not getting a pre-approved loan before buying a home

When you’re buying a home, one of the first things to do is get pre-approved for a loan. This will help you figure out how much money you can afford and what your monthly payment will be.

It also provides an opportunity to shop around for banks so that when it comes time to find homes in your favourite location, the process is quick and easy!

One way or another, getting approved ahead of time will save you both time and stress during this important purchase decision.

3. Not considering the resale value of the home

If you do not research the future growth potential of your home, it can affect the future value. In case, at some point, if you want to mortgage your home for a business loan, then it is better to have a higher resale value. On the other hand, it’s possible that you may need to do a reverse mortgage. In such cases, a higher resale value means a bigger loan is possible.

You cannot predict the resale value accurately. 

There are certain factors you can take into consideration to evaluate multiple properties under consideration.

We know there are certain areas that are getting connected via a ring road or a peripheral road that will develop better, meaning better future value.

A new special economic development zone that will come up next may positively impact the future growth of the property value.

4. Ignoring the importance of location when buying a home

Not all new homeowners are aware of the importance of location when buying their home. Some people may not be fully aware of the different areas and what they entail, while others may have preconceived notions about certain areas which can lead to a costly mistake. 

5. Putting less than 20% as the down payment

One of the most difficult questions you’ll have to answer when buying a home is how much of a down payment should I make? The typical response from people is that it depends on your financial situation and the requirements of particular banks you are going through.

At least 20% is what is recommended as a good down payment amount. So if you can’t afford to put at least 20% down then perhaps you should wait for some more time to make the money for the down payment.

6. Buying a pre-owned home without understanding the cost of renovation

It’s a common misconception that buying a pre-owned home will be cheaper than building your own. It seems like the logical choice, but if you don’t know what to look for and how to renovate it properly, you could end up with an expensive headache.

Much of your money will be put into fixing up the home. You may end up with hidden costs that weren’t anticipated at first glance (for example, would need to replace floors; fixtures & fittings).

I remember from my first home buying experience which was a pre-owned home. I ended up spending about 25% on top of the purchase price on the renovation. Not a pleasant experience, though!

7. Not talking to multiple banks for loan

It is important to talk to multiple banks for loans before buying a home to find the best deals. Often, new home buyers ignore this.

You should always ask around before making an investment, especially when it comes to big consequences like paying your life’s earnings in interest payments!