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uying a home has become increasingly challenging for millennials, with homeownership rates plateauing after years of growth. Many millennials are unknowingly making mistakes that lead to regret later on. A top-performing realtor shares common regrets and smart moves that pay off.
1. Overpaying on interest rates: Buyers often get caught up in advertised rates instead of shopping around for better deals. To avoid this, compare offers from at least three lenders, consider alternative loan strategies, and don't assume rates will fall in the future.
2. Going in without enough knowledge about the process: About 15% of millennials regret not knowing more about homebuying before starting. To avoid this, interview several local agents, read their reviews online, and find someone who's a market expert in your area.
3. Rushing into the wrong house: The pressure to buy can lead to compromising on things that matter long-term. Do your due diligence by verifying key details through third-party sources, not just the listing, and make a clear list of must-haves versus nice-to-haves before starting your search.
4. Waiting for the 'perfect' market: Millennials often wait for perfect market timing, but this can never be achieved. Instead, focus on whether it's the right time for you to buy, ensuring you have a stable job and clear plans, and prepare to stay in the home for at least five years.
5. Getting blindsided by ongoing expenses: Failing to budget for maintenance and other costs associated with homeownership can lead to regret. Budget for 1% to 3% of your home's value annually in maintenance costs, separate from mortgage payments, taxes, and insurance.
To avoid common mistakes, consider the following approaches:
* Calculate your true monthly cost by factoring in property taxes, insurance, HOA fees, and maintenance costs.
* Shop the slower seasons, such as late fall and winter, for less competition and more motivated sellers.
* Target stale listings, which often have sellers willing to negotiate on price or cover closing costs.
* Consider house hacking strategies, like buying a duplex and renting out one unit to offset mortgage payments.
* Explore specialty loan programs that offer assistance to homebuyers.
The key to avoiding regret is thinking strategically and not emotionally. Surround yourself with an expert team you trust, including a realtor and local lender, to guide you through the process and avoid common traps.
