House-Buying Mistakes Made At Every Age
Whether you're a first-time homebuyer or buying your second vacation home, it's easy to make a mistake during the process. You can be relieved that you're not alone, though, as the process is complicated and includes a lot of jargon and legalese that can be very confusing. The Seattle Times recently published an article discussing the top mistakes people make at every age, and I wanted to share them with you in the hopes that you can learn from them and avoid them in your own house hunt!
In Your 20's: Getting the wrong type of mortgage. In your 20s your often just starting your career and probably have less money saved to spend right away. This leads 20-somethings to often choose adjustable-rate mortgages (ARM). These seem like a great option because the rate is really low; however, when interest rates go up in five to seven years they can double or triple. This leaves many unable to afford their mortgage payment if they haven't properly prepared for the change. Instead of the ARM, experts suggest FHA loans, VA loans, or HUD-sponsored programs. Along with federal money, there are also state-sponsored grants that buyers can find on their state's website.
In Your 30's: Not thinking about the future. Homebuyers in their 30s often have a hard time considering their future when they're standing in the middle of a downtown condo with gorgeous views and access to a rooftop pool. This causes issues down the road when they have to sell in a hurry when life changes start happening. If you are currently home shopping, Ilyce Glink, author of "100 Questions Every First-Time Home Buyer Should Ask" suggests asking at least these three questions before purchasing your home:
1. Who do I imagine living with in the future?
2. Where do I imagine living?
3. How do I imagine living?
These answers should shape what type and location of home you purchase. For example, if you're hoping to have a dog in the future you might want a fenced yard.
In Your 40s-50s: Overestimating your budget. Hopefully, those in their 40s and 50s have more money than their younger homebuying counterparts; however, Glink suggests that figuring out your lifestyle comfort level is key. "Just because you can afford a [$900,000] home doesn't mean you should buy one. If you're married and both you and your spouse are working, figure out whether or not you can afford the mortgage payment if one of you gets laid off," Glink says. Figuring out your budget is crucial for all ages; but 40-50-year-olds should be especially careful to consider the things they're not willing or able to give up, like private school for their kids or saving for retirement before setting a home-buying budget.
60s+: Falling in love with that vacation home. Those in their 60s are retired or headed for retirement and are choosing to move to warmer climates or different countries. However, "relocating and buying a home is an expensive process so retirees should be sure they familiarize themselves with a new place before buying," says The Seattle Times. Before buying your new home in paradise, be sure to visit the area during every season. Additionally, try to live like a local while visiting so that you get a better picture of what day-to-day life will be like, not just as a tourist.
The most important tip I can give is that no matter what stage of life, you should consider using an experienced and seasoned real estate agent. One of my favorite things about my brokerage, Realogics Sotheby's International Realty, is the local and global connections. Even if I don't personally know an agent in another state or country, I have easy access to connect with a trusted agent backed by a Sotheby's International Realty affiliate. So, if you're thinking of buying in the Seattle area, or beyond, please don't hesitate to contact me to discuss the process.