First-Time Homebuyer? 7 Mistakes to Avoid in Today's Market

The Stakes Are High

Buying your first home is probably the biggest financial decision you'll make. In today's market — where prices are elevated, rates are higher than a few years ago, and competition is still fierce in many PA neighborhoods — the margin for error is thin. Here are the seven mistakes we see first-time buyers make most often, and how to avoid every one of them.

1. Not Getting Pre-Approved First

This is the number one mistake, and it's entirely avoidable. Too many first-time buyers start looking at homes before they know what they can actually afford. A pre-approval letter from a lender tells you your budget, shows sellers you're serious, and gives you leverage in a competitive situation.

Get pre-approved before you attend a single open house. It takes a few days and could save you months of frustration looking at homes outside your range.

2. Draining Your Savings for the Down Payment

Putting every last dollar toward your down payment is tempting, but it leaves you dangerously exposed. You'll need cash for closing costs (typically 2-5% of the purchase price in PA), moving expenses, immediate repairs, and an emergency fund for the unexpected things that always come up with homeownership.

Many first-time buyer programs in Pennsylvania allow down payments as low as 3-3.5%. It might mean paying PMI for a while, but keeping cash reserves is worth the tradeoff.

3. Skipping the Home Inspection

In hot markets, some buyers waive inspections to make their offer more competitive. This is almost always a bad idea for first-time buyers. A $400-$500 inspection can uncover issues that cost tens of thousands to fix — foundation problems, faulty electrical, roof damage, or hidden water intrusion.

If you're worried about competitiveness, consider an inspection for informational purposes only (meaning you won't ask for repairs but you'll know what you're getting into) rather than waiving it entirely.

4. Falling in Love with One House

Emotional attachment to a property before you've closed on it is a recipe for bad decisions. When you "must have" a particular house, you'll overpay, waive contingencies, and ignore red flags. Keep your options open, view multiple properties, and remember: there will always be another house.

5. Ignoring the Neighborhood

You can renovate a kitchen. You can't renovate the neighborhood. Drive through the area at different times of day. Check school ratings even if you don't have kids (they affect resale value). Look up the flood zone and property tax rates. Talk to potential neighbors if you can. The house is temporary — the location is permanent.

6. Not Budgeting for the True Cost of Ownership

Your mortgage payment is just the beginning. Property taxes in PA vary dramatically by municipality — some areas charge 2-3x more than neighboring ones for similar homes. Add homeowner's insurance, utilities (which are often higher than renting), maintenance (budget 1-2% of home value annually), and any HOA fees.

Before making an offer, calculate the full monthly cost including all of these factors. If it pushes you to the edge of your budget, look at a lower price point.

7. Not Working with a Buyer's Agent

Some first-time buyers think they can save money by not using an agent. In practice, buyer's agents provide market expertise, negotiation skills, and access to listings — and in most cases, the seller pays the agent's commission, so it costs the buyer nothing.

A good buyer's agent will save you from overpaying, help you navigate the inspection and appraisal process, and handle the mountain of paperwork that comes with closing. The value far exceeds the cost.