Homes are more affordable than they’ve been in decades, and mortgage interest rates are at historic lows. As a result, many first-time homebuyers feel that this is the perfect time to jump into the real estate market.

Buying a home is exciting, but it can also come with unforeseen economic obstacles. If you are a first-time homebuyer, you should be cautious to avoid financial surprises or errors when buying a home.

What follows are examples of four common mistakes that homebuyers make—and tips for how to avoid them.

1. Buyers don’t know their credit score. Knowing and understanding your credit score are important first steps to buying a home, says Walter Molony, an economic affairs media manager with the National Association of Realtors (NAR).

“In all probability, you’re going to need a mortgage,” Molony says, “And if you can’t qualify for a mortgage, you’re just going to be wasting your time.”

Because lax lending standards over a period of time caused the boom—and recent bust—in the housing market, lending standards now are much more restrictive, Molony says.

  • Figure out your credit score

Good credit is one of the first things lenders will look for in a potential homebuyer, so people should know whether they would be eligible for a mortgage. Common-sense actions like paying bills on time and not taking on multiple new lines of credit at one time could help potential buyers look better to lenders, Molony says.

2. Buyers don’t understand the pre-qualification process. In addition to understanding their credit scores, prospective buyers should go through a pre-qualification process with possible lenders to get a better idea of what they can afford.

“The fact is, buyers are usually very well positioned in terms of knowing what they can afford…without going through the pre-qualification process,” Molony notes. “But being pre-qualified for a mortgage gets you a leg up if you’re competing [for a home] with another bidder.”

3. Buyers are overwhelmed by prices. Every first-time homebuyer—or seasoned buyer, for that matter—should research average home values and real estate prices in the areas in which they’re thinking of buying. Numerous commercial websites show the prices at which homes in various areas sold, as well as listing prices for comparable homes in those areas.

For most buyers now—nine out of 10, according to data from the NAR—heavy research will be done via Internet before they take the next big step and contact a real estate agent.

“There are hundreds of thousands of real estate websites out there, so it can be a little like getting a drink out of a fire hydrant,” Molony says. “People want an agent to put that in context for them.”

4. Buyers don’t have the right team in place. When choosing an agent, home inspector, or lawyer to help with the purchase of a home, buyers need to know with whom they’re dealing. All real estate agents should be licensed through the state. Some agents are Realtors, meaning they follow a certain code of ethics set out by the NAR. Some agents represent the seller’s interest, while others represent the interests of the buyer, and still others represent the interests of both.

Prospective buyers should choose agents and other real estate professionals based on trustworthiness, knowledge in the market, and expertise, Molony advises. People often learn of such agents through word of mouth.

“Choosing a real estate agent is one of the biggest steps because buying a home, for most people, is the single biggest financial transaction [in which they are involved] in their lifetime, and they want to have a lot of confidence in that agent,” Molony says. “It’s really important that you have a good rapport with that person.”

Ask your friends and family for referrals before heading to the Web to search for real estate professionals. Then, meet those professionals in person before making your final decision.

By understanding your finances, doing thorough research on the real estate market, and surrounding yourself with a great team, you can avoid these common mistakes when you’re buying a home.

Michelle Stoffel Huffman is a researcher and staff writer for Think Glink Inc. Prior to joining Think Glink, Michelle worked for the Chicago Tribune as a daily news reporter and community manager, covering local government, business, tax issues and crime. She now specializes in real estate industry news, consumer financial reporting and home design and decor. She is a graduate of DePaul University in Chicago.