4 Common Mistakes First-Time Homebuyers Make (And How to Avoid Them)

February 18, 2025 - St. Louis, MO -

You've faced the challenges of being a renter for long enough, and you're finally ready to become a homeowner. Such an exciting milestone in your life! But before you pop the champagne and start ordering furniture, you must go through the home-buying process, which can sometimes present challenges of its own. We're here to share some of the most common mistakes that first-time homebuyers make, and, more importantly, we'll explain why they're mistakes, and how you can avoid them to make this process as smooth as possible!

Skipping the Pre-Approval Process: It's a common misconception that the first step in the homebuying journey is attending open houses and scheduling showings with your real estate agent. And we get it—that's the most fun part! However, the pre-approval process should always come first. Why skipping this step is a mistake: Say you go to an open house and absolutely fall in love with the home. You tell your agent you're ready to make an offer, and they write up a contract to submit to the seller's agent. Your offer gets accepted! When it's time to start the mortgage loan process, the mortgage company will do credit checks, review your bank statements, and do other deep dives to make sure you can afford the mortgage on this home. But if you don't have the funds in the bank to cover the financing of this home, your offer will ultimately fall through. Finding out how much you can buy before any offers get made is crucial. How to avoid this mistake: Working with Gershman Mortgage to get a pre-approval will help you determine how much house you can afford. Not only that, but it can also help you win a bidding war over a house! When the seller sees you've already been pre-approved by a lender like Gershman, they know the rest of the sales transaction will go smoothly and quickly. Reach out to a Gershman Mortgage loan officer before you start looking at homes. They'll work with you to get a quick and easy pre-approval, so no time is wasted, and no hearts are broken over contracts that fall through. Ready to get the pre-approval ball rolling? Click here.

Foregoing the Home Inspection: When a bidding war takes place over a home, buyers will do anything to sweeten their offer and make it appear better than all others. One trend that has gained popularity over the past few years is buyers waiving their right to a home inspection. Why not having an inspection is a mistake: Home inspections examine the home's structural soundness, mechanical systems, HVAC, safety components, and more to ensure that the home you're about to purchase doesn't have significant issues. If it does, you can negotiate repairs with the seller before the closing, have the issues remedied after closing by taking money off the final sales price, or walk away entirely. How to avoid this mistake: Even if the house looks perfect and up to date, you should never waive your right to an inspection when making your offer. There are other ways to make your offer stand out to the sellers, such as having a strong Gershman Mortgage pre-approval (see above), including an escalation clause in your offer, or writing a heartfelt letter to the seller about what you love about their home. Don't set yourself up for future headaches!

Not Taking Advantage of Down Payment Assistance Programs: You've got your pre-approval, you've got a house under contract, and now it's time for the loan process to start. Skipping over the options you may have in the form of down payment assistance (DPA) programs could be a costly mistake. Why skipping this step is a mistake: A DPA can lower the amount of cash you have to put towards your down payment. Keep your hard-earned savings in the bank, and let the DPA help you! How to avoid this mistake: Ask your Gershman loan officer to explore and explain all of your DPA options. It's commonly believed that only lower-income homebuyers are eligible for DPAs, but this isn't always the case! Grants, loans, and tax credits are available for various buyers, so do your due diligence! Your checkbook will thank you.

Underestimating How Much Home Repairs or Renovations Can Cost: As you're walking through an open house, it's easy (and fun!) to imagine what the home would look like if you made it your own. "We could knock down this wall." "We'll add an addition to the back of the house to add more sqft." "The basement isn't finished, but we can do that down the road." First-time homebuyers are especially prone to underestimating the cost and time involved in home repairs and/or renovations. Why not factoring this in is a mistake: If you're looking at homes that are already at the top of your budget but need a lot of work, you may be biting off way more than you can chew financially. Home repairs and renovations are notoriously more complicated, time-consuming and costly than meet the untrained eye. It's always best to think carefully about buying a home that needs a lot of work. How to avoid this mistake: Be realistic about your budget and timeline. If you don't think you'll love this home unless you can make expensive upgrades, it may not be the home for you. Chatting with a contractor about costs and timetables for the repairs and renovations you have in mind might help you decide whether or not you'll be able to afford them and the home's mortgage. Lastly, have a conversation with your Gershman loan officer about a Renovation Loan. These loans allow homebuyers to finance the purchase of a home plus the cost of home improvements all into one mortgage!

Being a first-time homeowner is an exciting experience. One that you should be proud of! However, it's essential to keep in mind that there are mistakes that can be made if you're not working with an experienced and knowledgeable lender. The team here at Gershman Mortgage is always here to answer questions, discuss options, and explore ways to set yourself up for success!

About Gershman: Communities, families, and homes are at the heart of what we do at Gershman Mortgage. Our founding principles are based on the core values of honesty, integrity, the entrepreneurial spirit, and putting our customers first. We are passionate and committed to customer service and strive to ensure that we exceed the expectations of our customers. We are a customer-centric company devoted to creating and maintaining long-lasting relationships.

NMLS #138063 16253 Swingley Ridge Road Suite 200 Chesterfield, MO 63017 (800) 457-2357 Equal Housing Lender. Serving borrowers in: Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Wisconsin