Few things in life are as satisfying as becoming a homeowner for the first time. But before you can achieve this goal, you need to navigate the home-buying process. Doing so successfully means avoiding common purchase pitfalls. Here are five of the biggest first-time homebuyer mistakes and how to avoid them.

1) Not budgeting carefully

No doubt about it: budgeting to buy a home can be complicated. What you pay each month in rent isn’t necessarily the amount that you can put towards a monthly mortgage. There are all kinds of new costs that come along with homeownership—including property taxes, insurance, and ongoing maintenance (to name a few).

Another common mistake first-time homebuyers make is assuming that the amount a lender approves you for should be your budget. You know your recurring expenses better than anyone, so it’s important to do some budgeting on your own. Just be sure that you also consider speaking to a mortgage specialist, who can offer expert advice that takes your unique circumstances into account.

2) Being unaware of your lending options

Banks, credit unions, online lenders, mortgage brokers. When you’re looking for a lender, you’ll find no shortage of options. Choosing the right one could provide you with access to some major benefits—like low interest rates or limited time offers. That’s why it pays to do your homework and shop around.

I always suggest that clients get to know the lending landscape before they make a decision. Understanding your options can help you make an informed choice about who you borrow from. As a real estate agent, I’m happy to help by providing the information you need to start weighing your options. But ultimately, the decision is yours to make.

3) Not getting pre-approved

Many first-time homebuyers don’t bother to get pre-approved for a mortgage before they start their home hunt. As far as I’m concerned, forgoing this early step can be a big mistake.

First off, you should know the difference between pre-qualification and pre-approval. Here it is, in a nutshell. When a lender pre-qualifies you, they look at your financial history and provide you with an assessment of how much they might be willing to lend you toward a home purchase. In contrast, a pre-approval represents an actual lender commitment to finance your home purchase.

For obvious reasons, sellers are more likely to take your offer seriously if you’re pre-approved. A pre-approval letter could give you the edge if there’s an offer from another buyer who doesn’t have one. It can also speed up your transaction, allowing you to wrap things up as quickly as possible.

4) Not understanding contingencies

Your purchase contract will lay out all of the terms and conditions of your home-buying transaction. Unfortunately, some items in this document are commonly misunderstood by first-time homebuyers. Contingencies or conditions are one of the best examples.

Put simply, contingencies are the conditions that buyers and sellers must meet in order for a transaction to be completed. They can offer a certain amount of protection for homebuyers. For example, a financing contingency states that the purchase of a new home will only be completed if the buyer gets the financing they need from their lender (and they can’t be penalized if they don’t get it).

Other common examples include a sale of buyers home and a property inspection. The former states that a home purchase isn’t complete until the buyer has sold their current home, and the latter ensures that the transaction isn’t complete until after a successful home inspection occurs.

As a buyer, you will be asked to waive your contingencies as part of a deal. If you do so, you should fully understand what you’re committing to—otherwise, you could find yourself in a sticky legal situation. Once you have waived your conditions you are committing to the purchase, which also includes committing the deposit which was being held in trust to the seller.

5) Being overly influenced by staging

I hear it all the time. Buyers finish touring a home, and they can’t stop talking about the leather couches or colourful artwork they just saw. They forget that in most cases, these items will be leaving when the seller does.

It makes sense to be inspired by a beautifully-staged home. But a house or condo is one of the biggest purchases you’ll ever make. Decor and furniture shouldn’t be the deciding factors.

I always remind first-time buyers to take stock of the factors that matter. Size. Layout. Natural light. These are the features you’re buying when you purchase a home. Conversely, don’t write a house off because it ‘is too dark,’ or ‘the backsplash is ugly.’ Oftentimes these are the opportunities to capitalize on and earn some sweat equity when it comes time for you to sell down the road.

Looking to buy your first home? I have the experience to help you through the buying process. Get in touch, and we can discuss your needs!