When Liz Stanfield and her husband bought their first home in Murray, Utah, about 30 years ago, they thought they were being frugal purchasing without a real estate agent. But they found themselves fixing toilets mounted incorrectly and releveling the entire home, among dozens of other repairs. Stanfield still kicks herself for her easily avoidable mistake, especially now that she's a Realtor.

If you're a first-time homebuyer, don't make the same mistake or any of these errors.

Do it alone

Some buyers believe the myth that they will save money if they don’t get a real estate agent involved, but agents are a free service to buyers. Buying a home is a legal process that can get complicated quickly. Seek professional representation from Realtors who have your best interests in mind.

“For a buyer to walk around and think they are going to find a deal or get treated fairly is naive,” Stanfield says. Buying a home without someone who knows where to fill in blanks in the final agreement will ultimately cost you more money.

Search for homes before a loan check

Prequalification for a loan can take more time than you think, so don’t find a dream home before speaking to a lender. It’s virtually impossible to know exactly what you can afford before consulting one anyway, Stanfield says. Since lenders’ skills and knowledge differ across the board, shop around to find one who is credible and works well with deadlines, preferably one who has been referred to you. Good lenders can work through problems you never thought surmountable, such as bankruptcy or poor credit.

Spend too much on the down payment

Neal Bingham, owner of Altius Mortgage Group, finds that couples too often save up to 20 percent of the home's price for the down payment, but there’s no need. In today’s world, you can still get a great mortgage rate if your down payment is 3 to 5 percent of the purchase value. That’s a little over one month’s worth of rent for many couples, Bingham says. Plus, if you spend all your savings on the down payment, you may find it tough to pay for utilities or the inevitable unexpected expenses that occur with homeownership.

Buy big before the sale is final

It is general knowledge that taking out a new loan will boost your debt and drop your credit, but many may not realize that a big purchase can affect you if you make it even minutes before closing. Lenders often pull credit reports right before the final signing, so going into debt for a car or new furniture before closing on a home can put the whole deal at risk. Delay big purchases even while searching for a home because it takes time to build up credit again after it drops.

Turn away from fixer-uppers

Homes that need a lot of work can be intimidating, but flipping a house and earning equity is a great option for a first-time homebuyer. Paint and carpet can be inexpensive, and you’d be surprised how adding just a little square footage can go a long way when putting the house back on the market. That is most easily done by finding a house with an unfinished room or basement, Bingham says. With homes selling at top dollar, now is a great time to flip.

Search for a condo or townhome

These can seem like a great deal, but what many people forget are the homeowners association fees that accompany the cost of your home. You’ll qualify for less of a mortgage with an HOA because it is calculated into your payment. It’s not a deal breaker, but it’s a good idea to take that into account when comparing house prices.

You might not be ready to buy a home just yet, but beginning the search helps you understand how much to save and what your options are. House prices eventually increase over time, even if the market takes dips every now and then, so if a new home is in your future, the best time to buy is the present.

Related topics