It’s no secret that buying a home is a huge investment. Unfortunately, it’s easy to make mistakes during the home buying process.
For many Americans under the age of 40, it may not be the first time you’ve bought a house. But many younger millennials are just now becoming a part of the 34% of first-time homebuyers.
To help you keep from making a bad investment, we’ve compiled some of the most common mistakes young homebuyers make and how you can avoid them.
Not saving enough money before the purchase
One of the biggest challenges for the millennial generation is student loan debt. In fact, the nation’s total student loan debt has reached $1.5 trillion.
While this debt can keep many first-time homebuyers from being able to afford a down payment, it’s important that you’re not just saving for the down payment alone. You’ll also want to save for any repairs and damage that may be caused by unexpected disasters you encounter after you buy the property.
Up to 69% of millennials consider themselves to be adventurous, but you don’t want to be adventurous when it comes to financing for a house. According to a survey by NerdWallet, up to 48% of first-time homebuyers said they didn’t plan for the costs of additional home maintenance, and 46% said they went over budget on home improvements.
Choosing the wrong neighborhood
According to a Trulia/Harris Interactive survey, 84% of respondents said that finding the right neighborhood was more important to them than finding the right house.
But it can be challenging to find the right neighborhood to move to when you’re not necessarily familiar with the area. For instance, 45% of homes sold in Maui in 2016 were bought by out-of-state buyers.
What’s more, a neighborhood that seems right for you now may not seem right for you years down the road. You may want to be near dining and shopping now, but may want a neighborhood with a great school district if you have kids.
Likewise, you may like a quiet neighborhood now, but it may end up being too far to commute. You might also find it too quiet the longer you live there.
While living in the wrong neighborhood may not seem like too big of a deal when you buy your home, it can take a toll on your mental health. And considering 50% of Americans with major depression don’t seek treatment, you want to be sure you’re making the right decision to avoid disappointment.
Letting yourself get distracted
It’s often recommended to have a friend or family member come with you to visit a house because they’re able to keep you on the right track. It’s all-too-easy to get distracted by an incredible neighborhood or beautiful architecture.
But letting yourself get distracted by these features can keep you from making a logical decision when buying a house. Crown molding and new appliances may try to convince you that an old water heater and rusted pipes are nothing to worry about, but they are something to worry about.
It’s also important that you’re choosing to buy a house based on what you think about the property personally. Your real estate agent is there to give you information and to provide you with all the potentials that a house can provide because it’s part of the customer experience. Up to 72% of businesses say customer experience is their top priority.
But it’s not your real estate agent that’s buying the house. You are. If you don’t think a house will work for you, or that it may only work for you now but not in the future, don’t trick yourself into making the investment.
Buying a home isn’t an easy process and there are many mistakes you can make along the way. By following the tips above, you can do your best to avoid some of the most common mistakes first-time homebuyers make.