First-time homebuyer mistakes can prove extremely regretful, both financially and emotionally. While it’s very exciting to buy your own home for the first time, you need to stay focused on making no mistakes.
As Florida real estate attorneys, we’ve seen it all and know what the common pitfalls are. You should have no shame in asking attorneys and real estate agents questions. It’s always better to be safe than sorry.
Table of Contents
Common First-Time Homebuyer Mistakes in Florida
1. Not Using First-Time Homebuyer Benefits
First-time homebuyers may be entitled to programs that can help finance first property purchases.
For example, Tampa’s ‘Dare to Own‘ program helps new homebuyers within the city limits pay for down payments.
There are three government-insured loan programs for first-time homebuyers, provided by the Federal Housing Administration (FHA loans), U.S. Department of Agriculture (USDA loans) and U.S. Department of Veterans Affairs (VA loans). It is always worth searching to see if you’re eligible for these programs.
- FHA Loans: Just 3.5% down is required, with a minimum 580 credit score. These loans can help borrowers bridge the gap if they don’t have incredible credit or big savings. However, mandatory mortgage insurance is required annually and upfront.
- VA Loans: Active-duty and veteran military service members (and their spouses) are eligible for VA loans. These loans are provided via private lenders, with a cap on lender fees to minimize borrowing costs. There is no required payment but you may need to pay a funding fee.
- USDA Loans: Moderate to low-income borrowers in rural areas can gain support via USDA loans. Area and income limits apply to qualify.
2. Waiving a Home Inspection
One of the biggest first-time homebuyer mistakes is to think it’s wise to save money by waiving a home inspection. If you’ve been considering this, then think again.
Even if you visit a property and believe there are no issues to be worried about, do not risk it. The money saved is almost never worth it.
Picture this: You move into your new home after waiving a home inspection. The dream is a reality, right? But maybe you’re actually about to enter a nightmare.
If within days you start noticing big problems such as significant mold damage, structural problems or awful plumbing issues, then it’ll be too late for the seller to repair them.
Instead, you will be the one paying for it. And those repairs will likely be far more expensive than an inspection cost. Years of savings and hard work will be gone. Your dream home will now be a construction site until fixed.
Worse, you may also:
- Struggle to get your property insured;
- Struggle to resell the home;
- Struggle to negotiate;
- Be unable to walk away like you would if you had a home inspection that revealed the problems.
3. Buying a House for More Than You Can Afford
Many first-time homebuyers make the mistake of falling in love with a property that pushes their budgets. This is never a good idea.
Although pre-approval will provide a solid estimate of how much you can afford, it might not fit your budget. You must factor in your monthly expenses.
If you buy a home for more than you can afford, you increase the risk of foreclosure during hard times. Plus, do you really want to cut back on all your other expenses from bills to retirement accounts or personal savings?
Instead, you should focus on what monthly payment you can comfortably afford. You might be able to qualify for a $300,000 loan, but that doesn’t mean you need to go for the maximum figure.
Of course, every first-time homebuyer’s situation is different, so consider your entire financial profile.
4. Looking for a Home Before a Mortgage
Another common first-time homebuyer mistake is to look at a house before meeting a mortgage lender.
With the current residential real estate market so competitive, you will seriously struggle to get your offer accepted if you don’t have either a mortgage pre-approval or cash in hand.
Sellers don’t take risks on people who don’t have evidence that they can get a mortgage. Why would they? There is always a queue of other buyers with pre-approved mortgages lining up.
This is usually a waste of time and can see you miss out on a potential home.
Instead, you should ensure you’ve got a fully underwritten pre-approval. Doing so will clearly indicate you’re a serious buyer, fit and ready to purchase the home.
5. Not Getting Contracts Reviewed
First-time homebuyers should never complete a real estate purchase without a contract review provided by a Florida real estate attorney.
Contracts contain everything from contingencies and home review inspections to closing dates and closing cost agreements.
One mistake in your phrasing here can be interpreted in a costly way. Plus, if you completely overlook a crucial factor, you could be liable if the deal collapses.
A real estate lawyer will help you:
- Reduce the chances of an expensive legal dispute in the future.
- Ensure fairness and protection on your behalf.
- Help you understand all of the conditions specified in your contract.
- Ensure any contingencies are in place to prevent you from facing liability.
- Ensure you are able to walk away from the deal with your deposit if a contingency is not met during the required time frame.
Contact a Residential Real Estate Attorney in Florida
If you want to avoid making a common first-time homebuyer mistake, then our Florida residential real estate attorneys are here to help.
Our team provides legal assistance for all areas of residential real estate, from drafting and negotiations to closure. Our expertise can ensure you avoid unwanted liability issues and enjoy a smooth transition into homeownership.
If you’re purchasing a new home in St Petersburg, Florida then contact us today. Our attorneys, Ross and Purdun at Battaglia, Ross, Dicus & McQuaid, P.A. have extensive experience that can help you secure your first home without any hiccups.