First-Time Homebuyer’s Guide: Steps to Avoid Common Mistakes

Buying your first home is an exciting milestone, but it can also be overwhelming. Without the right knowledge, many first-time buyers make costly mistakes that could have been avoided.

This guide will walk you through the essential steps to buying your first home while steering clear of common pitfalls. Let’s get started!

Step 1: Assess Your Finances (Before You Start Looking)

Check Your Credit Score

• Most lenders require a minimum credit score of 620 for conventional loans.

• The higher your score, the better your mortgage rate.

Calculate Your Budget

• Use the 28/36 rule:

  • 28% of your gross income should go toward housing costs (mortgage, taxes, insurance).

  • 36% should cover total debt (including car loans, student debt, etc.).

• Don’t forget closing costs (typically 2-5% of the home price).

Common Mistake:

• Falling in love with a house before knowing what you can afford.

Step 2: Find the Right Real Estate Agent

Why You Need an Agent

• They negotiate on your behalf and handle paperwork.

• They know local market trends and hidden gems.

Common Mistake:

• Hiring the first agent you meet without checking reviews or experience.

Step 3: House Hunting – What to Look For

Must-Haves vs. Nice-to-Haves

• Prioritize essentials (e.g., location, bedrooms, school district).

• Be flexible on cosmetic fixes (paint, flooring can be changed).

Red Flags to Watch For

• Foundation cracks

• Water damage/mold

• Old HVAC/roof (expensive to replace!)

Common Mistake:

• Ignoring inspection contingencies and buying a money pit.