8 Mistakes to Avoid When Buying a Home
You’ve been saving for awhile, weighing your options, looking around casually. Now you’ve finally decided to do it—you’re ready to buy a home. The process of buying a new home can be incredibly exciting, yet stressful, all at once. Where do you start?
It is essential you do your homework before you begin. Learn from the experiences of others, do some research.
1. Searching for houses without getting pre-approved by a lender
It is important to know your numbers before you start looking for a home, and online mortgage calculators are fine to give you a general idea of what you can afford, but you need to speak to a mortgage professional in order to receive an accurate, financial picture of what you can afford. Focus on the properties that you can afford and are within your budget.
2. Allowing “first impressions” to overly influence your decision
The first impression of a home has been cited as the single most influential factor guiding many purchasers’ choice to buy. Make a conscious decision beforehand to examine a home as objectively as you can. Don’t let the current owners’ style or lifestyle sway your judgment. Beneath the bad décor or messy rooms, these homes may actually suit your needs and offer you a structurally sound base with which to work. Countertops, appliances, and paint colour can be easily changed – location and size of a home cannot.
3. Failing to have the home inspected before you buy
Buying a home is a major financial decision that is often made after having spent very little time in the property itself. Oftentimes, buyers are more focused on determining if the home will suit their needs, rather than looking at the mechanics of the home. A home inspection performed by a professional will provide added reassurance that the choice you’re making is a sound one, or alerting you to underlying problems that could cost you significant money in both the short and long-run.
4. Not knowing and understanding your rights and obligations as listed in the Offer to Purchase
Read through the purchase contract! Know what you are signing. Your REALTOR® will be including terms and conditions to protect you and your interests. Understand what you are signing, and that this is a legally binding contract. You must enter into it with a sincere intention of purchasing the property.
5. Making an offer based on the asking price, not the market value
Ask your REALTOR® for comparable homes that have sold in the area. This will provide you with the information necessary to gauge the market value of a home and will help you avoid over-paying. What have other similar homes sold for in the area and how long were they on the market? What is the difference between their asking and selling prices? Is the home you’re looking at under-priced, over-priced, or fair value? The seller receives this information before deciding upon an asking price, so make sure you have all the same information at your fingertips.
6. Failing to familiarize yourself with the neighbourhood before buying
Check out the neighbourhood you’re considering and ask around. What amenities does the area have to offer? Are there schools, churches, parks, or grocery stores within reach? How will you be affected by a new commute to work? Are there infrastructure projects in development? All of these factors will influence the way you experience your new home, so ensure you’re well-acquainted with the surrounding area before purchasing.
7. Not looking for home insurance until you are about to move
If you wait until the last minute, you’ll be rushed to find an insurance policy that’s the ideal fit for you. If you are purchasing an income property, be sure to speak to your insurance professional about insurance while it is a rental unit – there is special insurance for income properties to help cover you as the owner.
8. Not recognizing different styles and strategies of negotiation
Many buyers think that the way to negotiate their way to a fair price is by offering low. However, in reality this strategy may actually result in the seller becoming more inflexible, polarizing negotiations. Have a discussion with your REALTOR® regarding the best strategy to get you a fair price for your potential new home.