House Hunting Pitfalls: 17 Costly Rookie Mistakes To Avoid

homedude is reader-supported. When you buy through links on our site, We may earn an affiliate commission. Learn more

Embarking on a home search is an exciting milestone, but it comes with challenges and takes time, patience, and self-control. Property virgins can get so wrapped up in the emotional aspects of buying their first home that it becomes easy to make mistakes. But if you know the most common mistakes first-time house hunters make, you’re better prepared to avoid them.

1. Not Getting Pre-Approved

Looking for one of the biggest purchases you’ll ever make before you even know if you can afford it is a waste of time. Plus, most real estate agents will not show you any houses unless you have a pre-approval letter in hand.

Don’t confuse a pre-approval with one of those “see if you qualify” sites online. Those tools give you a rough idea of how much house you can afford, but that’s assuming you’re being entirely truthful with your financial situation. Visit lenders to run your real numbers and find out how much you qualify for and what they’re actually willing to loan you.

2. Forgetting To Update Your Pre-Approval

Once you get pre-approved, it’s like getting the green light for your house-hunting journey. Agents will review the amount and show you houses within your projected loan amount. However, pre-approvals typically expire after a few months—the average is three months. Therefore, make sure to keep it current.

Also, stay in touch with what interest rates are doing. A change in the interest rate means a change in how much house you can afford. For example, if a few weeks into your home search, interest rates drop from 7.5% to 6%, it’s worth reassessing your numbers and updating your pre-approval.

3. Not Being Honest With Lenders 

It’s tempting to fudge your numbers a bit to try and get a bigger loan. Maybe you inflate your freelance income or mention that you’re getting a financial gift from your parents to put 20% down. But if you have a lender run your numbers based on inaccurate information, you’re only hurting yourself.

You want a clear picture of your price range so you don’t look at properties outside your comfort zone.  You also don’t want to end up in a questionable situation with your lender.

4. Letting The Lender Dictate What You Can Afford

When lenders process your application, they review a few basics, including income, existing debt, and credit score, to decide the maximum amount they’re willing to lend you. Most of the time, this figure is significantly higher than what first-time homebuyers can actually afford. Why?

Lenders don’t consider your whole financial picture, like family loans, your love of travel, or your savings for your kid’s college. You know your numbers best, so look at your budget and tell the lender the maximum you want to spend on a mortgage payment. Have them use this number to determine your pre-approval amount.

5. You Don’t Work With A Real Estate Agent

Online real estate sites make the housing market extremely accessible to everyone. With a few clicks, you can have tons of potential homes at your fingertips. It’s tempting to proceed through the process on your own, but nothing beats working with a professional, knowledgeable agent.

An agent has an inside scoop on properties that don’t appear in your searches. They also know the market, help you navigate the mountains of paperwork, and negotiate on your behalf for the best deal.

6. Not Knowing Your Credit Score

A few months to a year before you start house hunting, check your credit score and pull your free credit report at annualcreditreport.com. The higher your score, the better interest rate you can get, which means the lower your mortgage payment. If you have a low score or find issues on your credit report, this time frame gives you adequate time to repair problems and boost your score.

7. You Use Too Many Search Filters

When you search online for houses, don’t go overboard with the convenient filter tools. Doing so could narrow down your search results a little too drastically. For example, these tools allow you to input your desired square footage, how many bedrooms, style of home, lot size, house age, and many more criteria.

However, these search engines aren’t foolproof and depend on how the information is entered into the database. The more filters you use, the more likely you’ll miss potentially great houses.

8. You Stop House Hunting After You Find “The” House

Looking at homes is fun but can also be exhausting, especially if you’ve been hunting for a while. When you finally find the “one,” you may assume your journey is through. But don’t stop looking. A lot can happen between putting in an offer and closing day. If the deal falls through, you may have lost your chance at other potential homes.

9. Waiting Until You Have A 20% Down Payment

The common recommendation when buying a house is to put 20% down. This number gives you a good foothold in the market with solid equity, and you avoid paying private mortgage insurance (PMI).

But even though this is the most popular option, it isn’t the only one. Various loan programs allow you to buy a house with less money down, like FHA loans, VA loans, or special programs for first-time home buyers.

10. Draining Your Savings To Buy A House

It’s tempting to put as much down on a home as possible to reduce your monthly payment. However, resist pouring all of your savings into your down payment. Leave some funds available for other costs associated with your purchase. Don’t forget about moving expenses, money for home repairs, setting up your new place, and any new furniture or decor you plan to purchase.

11. Changing Jobs During Your House Hunt

House hunting isn’t a good time to change jobs. The reason is lenders look at your current work history and like to see stability. Many lenders want to see at least one to two years at your current employer before they approve you for a loan.

Of course, it makes sense to make the change if you’re leaving a job that pays you $30,000 for one that pays $80,000. But discuss the situation with your lender and be honest so you don’t jeopardize your loan.

12. You Let Others Influence What House You Buy

Your in-laws are pushing you to move into the home down the street, but it’s about $40,000 above your budget. No matter how heavy the pressure is, you’re the one that needs to live in your home (and pay for it). Therefore, you get the final say. It’s perfectly fine to listen to opinions from trusted friends and family. But don’t let anyone make you do something you aren’t comfortable doing.

13. Forgetting To Shop For Insurance

When you’re ready to buy a house, you need to shop for more than just a new home. It’s essential to protect your investment. Start shopping early for homeowner’s insurance and any other necessary protection, like flood, wind and hail, or earthquake coverage. Your lender will want proof of insurance before they finalize the loan, and if you wait until the last minute, you risk getting stuck with subpar coverage or ridiculously high premiums.

14. Holding Out For The Perfect House

Nobody wants to settle, especially when they’re paying thousands of dollars. But if you don’t consider a house unless it checks every box on your wishlist, you will be disappointed. There’s no such thing as a perfect house. Make a list of your absolute must-haves (be realistic) and any deal breakers — then be willing to compromise on the other areas.

15. You Leave Out Important Contingencies

You finally found a house you love. Understandably, you can’t wait to close on your new place, but you find out there might be other offers. You really want the house, so you make your offer as appealing as possible by scratching out things like the home inspection contingency or doing a final walkthrough. The problem is that you end up opening yourself up to huge risks. Stay smart and leave important contingencies in the contract.

16. Not Factoring In Closing Costs

The down payment isn’t the only money you need to bring to closing. You’ve likely heard the term “closing costs,” but what are they? Typically, closing costs run approximately two to five percent of the home price. 

These costs include title fees, underwriting fees, first-month payment for insurance, the appraisal, etc. You typically can roll some of the costs into your loan, but doing so will raise your monthly payment.

17. Letting Emotions Take Over

Buying a house is emotional; there’s no getting around it. But keep your wits about you, and don’t let your emotions take control.  If you let your feelings drive you, you’re more likely to buy more house than you can afford or make mistakes, like waiving contingencies. If you struggle with staying firm, it’s a good idea to enlist the help of someone you trust who can help keep your feet on the ground.