Mistakes to Avoid as a First-Time Homebuyer

  | 5 min read
first time homebuyer mistakes

“I regret buying that house.” These are words you don’t want to utter at any point in your life. Many home buyers have found themselves in this situation after they purchased their first home. As a novice, it is very easy to make some first-time homebuyer mistakes. Some of them could be small while others could set you back financially for years.

Lucky for you, we have compiled a list of mistakes people make and how to avoid them.

House hunting before pre-approval

house hunting before approval

The idea of buying a house is exhilarating and nerve-racking at the same time. You will finally stop paying rent to someone else and get to enjoy living in your own home. On the flip side, you don’t know where to start with the entire process. Do you look for the house first or do you apply for the mortgage?

The mistake people make is to find a house which is over their budget or one where they will be paying high monthly charges. There is no point in falling in love with a house you can’t afford. This leads to more frustration and feelings of “downgrading” when you do find a house within your budget.

Solution: Save. Save. Save. Then when you start house hunting, find a house that suits your budget. Determine how much space you will need, the location you want to live in and the essential items you will require in your house. Estimate your monthly mortgage charges with your current income and not what you hope to earn in future.

Not doing a pros and cons list of the house

When house hunting, you see so many available options that are within your budget or expensive. You settle on things that you want and not necessarily need. For instance, you find a house far away from your office which makes you think you can handle the longer commute. But the way Nairobi traffic is, you can never be too sure what will happen.

Solution: Start with the most important things like deciding whether you want a townhouse or a bungalow. Then think about the location; where you want to live. Then, look at more than 5 houses so that you can know what you are working with.

Not researching mortgage lenders

research mortgage lenders

Another big mistake people make when house hunting is settling on the first mortgage lender they come across. They don’t take time to carry out proper research to find out what they are getting themselves into. They often pick the lender offering the lowest interest rates not forgetting there are other transaction fees you will incur when buying a house.

Solution: Applying for a mortgage takes time. It is a lengthy process which will require some patience and commitment on your part. Different lenders have different terms and conditions. Research on approximately 3 lenders in the market. Look at the products they have to offer. Don’t forget to read customer reviews to see what people are saying about the company and the experiences they have had.

Buying an expensive house after approval

If you have previously bought a house through a mortgage lender, you know how exciting it is to know that your loan has been approved. The mistake people make is using all the money the lender has approved. You’re forgetting there are hidden costs when buying a house. You’re still paying rent in the current house you live in and you have monthly expenses.

Solution: Even if you are in a position to pay off the monthly payments towards your mortgage loan, this might put a strain on other areas of your life. Remember, the higher the amount you borrow, the longer the duration for paying it off. Plan accordingly.

Not working with an agent

real estate agent showing house
Many people hear the words “real estate agents” and they immediately think negative things about them. They end up going through the entire journey on their own; speaking to the seller directly which leaves them vulnerable to conmen, paying high prices, or making the wrong purchase.

Solution: Let’s face it. Estate agents know way more about real estate than you do. They have a vast knowledge of property, prices, negotiations, neighbourhoods, trends in the industry and way more. You need someone like this in your corner to help you make the right decision when you decide to buy a home.

Spending all your savings

Let’s assume you have already bought the house. You spent all the money you had saved to buy the house. Now you don’t have any cash to sustain you in the future. There are repairs you will need to do in your new house. You might need to furnish your place because you got a bigger space. The bills are higher. But you don’t have money. You didn’t set aside money for any emergencies because you spent all of it buying the house.

Solution: We can not stop stressing the importance of saving to cater to any unforeseeable expenses.

Not doing an inspection

Once people buy the house, they don’t feel it necessary to do a home inspection because it costs a lot of money. But avoiding carrying out one can be more costly than the amount of money you were to spend on the inspection.

Solution: Get a professional inspector if you are moving to an old house. They will notice things that you will not. If the house needs repairs, you can negotiate with the current homeowner to fix them before you move in.

What Next?

Read more on tips on buying a house.

Maureen Mbithe
Content Writer at BuyRentKenya