What Mistakes Do First-Time Buyers Make in Orange County?

Most problems don't come from bad decisions. They come from not knowing what's coming next. Buying a home has a lot of moving pieces, and the first time through, a few of them are easy to miss.

I'm Jeanette Nelson, a REALTOR® with Jeanette Nelson Real Estate, Keller Williams Realty, serving Orange County, Huntington Beach, Costa Mesa, Fountain Valley, and surrounding areas. With first-time buyers, I walk through these exact mistakes before we ever tour a home, so you can plan around them instead of finding them in escrow.

Often it isn't. The Consumer Financial Protection Bureau (CFPB) says lenders use "prequalification" and "preapproval" differently. Some base a prequalification on information you report without checking it, and issue a preapproval only after verifying your documents. Either way, the CFPB notes that the letter is not a guaranteed loan offer.

The mistake is touring homes and falling in love before your lender has actually looked at your income, assets, and credit. Ask your lender directly: "Have you verified my documents?" For more on the difference, see What's the Difference Between a Pre-Approval and a Pre-Qualification Letter.

Yes, it can. The CFPB advises against taking out a car loan, making large purchases on credit cards, or applying for new credit cards in the months before you buy. It explains that doing so can lower your credit score and raise the interest rate lenders charge you.

Your lender verifies your income as part of approving your loan. A new job, a gap in work, or a switch to self-employment can change what your lender needs from you. Before you change anything about your work or your credit, call your lender first.

No. This is one of the most common surprises. Your cash to close includes your down payment plus closing costs. The CFPB lists appraisal fees, title insurance, government taxes, and prepaid items like property taxes, homeowners insurance, and interest among the common ones.

Then there are costs after you move in: furniture, repairs, utilities, and possibly HOA dues. Plan for those too. What Will I Pay at Closing as a First-Time Buyer breaks down each line.

The CFPB requires that you receive your Closing Disclosure at least three business days before closing, so you can see the final numbers before you sign.

In California, a home is reassessed when it changes ownership. The Orange County Treasurer-Tax Collector explains that a supplemental tax bill covers the difference between the old assessed value and the new one, and it is separate from your regular property tax bill.

A few points from the Treasurer-Tax Collector that catch new owners off guard:

• You will normally receive your supplemental bill or bills within one year of buying.
• Some owners receive more than one.
• Mortgage companies do not usually pay supplemental bills, even if you have an impound account.
• It is the owner's responsibility to make sure the supplemental taxes are paid.

Set money aside for it after you close, so it doesn't arrive as a surprise.

Yes. If you buy a condo, townhome, or a home in a planned community, the HOA's rules become your rules. The California Department of Real Estate's buyer guide explains that when you buy a property subject to CC&Rs, you are in effect agreeing to abide by them.

Read these before your contingency period ends:

• CC&Rs and rules. These can cover pets, rentals, parking, and changes you can make to your home.
• The budget and reserves. The DRE guide notes that HOAs can levy special assessments for expenses regular dues don't cover.
• Current dues and any pending assessments.

If something in the documents concerns you, ask questions while you still have time to act.

You can, yet I don't recommend it for most first-time buyers. An inspection tells you about the home's condition before you're committed. It can point to repairs to plan for, items to ask about, or reasons to rethink the purchase.

Even when you're competing with other offers, there are ways to keep your offer strong and still learn about the home. We talk through those options together. If you're up against cash buyers, How Do I Compete With Cash Buyers as a First-Time Buyer covers what can help.

If you want to buy your first home without these surprises, let's build your plan before you start touring. Call or text me at 714.366.8575 | DRE: 01397168, or contact me. Jeanette Nelson is a REALTOR® with Jeanette Nelson Real Estate, Keller Williams Realty, serving Orange County, Huntington Beach, Costa Mesa, Fountain Valley, and surrounding areas.