If you’re a home buyer about to embark on the sometimes-bumpy road of home ownership, it’s critical to know the most common mistakes home buyers have made so that you can avoid them altogether.
From agents and bankers to lawyers, accountants, and other real estate professionals – each has compiled their list of the most frequent missteps taken by buyers (particularly first-time home buyers).
Let us provide you with some sound advice so that you feel confident when taking on the task of the most expensive purchase of your lifetime.
Be sure not to miss out on our comprehensive look at buyer blunders to avoid any costly pitfalls down the road.
Home Buyer Mistakes #1: Confused Home Buyer
Home buying can be an exciting and sometimes overwhelming process. As home buyers, it’s easy to fall in love with the features but its important to define what you need in a home before you begin looking to avoid one of the most common home buyer’s mistakes, i.e., being a confused home buyer.
Getting caught up in features that may look nice and desirable is easy, but if you can’t fulfill your family’s needs with the home, then all those flashy features won’t matter.
Instead of letting emotions cloud judgement, make sure to focus on your needs first and wants last, as a house with a stunning view is no compensation for not having enough bedrooms or living space that suits your family size.
Make sure you understand what size home work best for you before diving into any home search!
Don’t start looking before you figure out what you are looking for!
Home Buyer Mistakes #2: Shortsighted Buyer
A home is not just a purchase but also an investment, yet far too frequently, home buyers make mistakes and end up with incomplete visions of their home’s future needs.
One such mistake is being shortsighted when it comes to their home-buying decisions. Many home buyers are focused on their current needs and must remember to consider what they may need in 5 years or ten years.
If you are one of these shortsighted home buyers, think ahead and give yourself the extra space that can offer financial security in the long run.
Purchasing a home big enough for an expanding family that can also accommodate home-based businesses, in-laws, or other considerations you may have will ensure you don’t need to upgrade your home within just a few years.
Don’t let short-sightedness cost you time and money – buying a home that meets your current needs while still accounting for potential future needs can be a crucial decision when purchasing a home.
The purchase price is important so are your family’s near-future needs for a home.
Buy a House Which Accommodates Future Needs.
Knowing what you can realistically afford when buying a home is important. Remember that additional costs include homeowners mortgage insurance, property taxes, appraisal fees, home inspection fees and closing costs.
Finding a reliable real estate agent or mortgage broker to help guide you through this process is recommended, as they will ensure you don’t become an unrealistic home buyer.
Remember to consider a credit card balance, car loans or other debt, if any, so that the home fits within your budget. Start on the right foot by only taking on what is affordable and reasonable, given your current earnings and cash flow.
Buy a House You Can Afford.
One home buyer mistake that can cost you the home of your dreams is not getting pre-approved for a mortgage.
Many sellers will only take your offer seriously once they know that you can qualify for a mortgage, and having a pre-approval will give you a leg up over other home buyers.
To make sure you’re prepared to make an offer, speak to a reliable mortgage broker about what house you can afford, the required down payment, and the best lender for your needs with their interest rates and conditions.
Knowing this information will help streamline the home-buying process and ensure that your home-buying experience is enjoyable and painless.
Mortgage pre-approvals matter when it comes to home buying, so make sure to get one!
Learn the difference between mortgage pre-approval and mortgage pre-qualification and act accordingly.
Mortgage Pre Approvals Matter.
Before you start home shopping, consider every possible source of cash – do you have paid for insurance policies with cash value or retirement saving plans (RRSP) that can be used for buying a home? Don’t forget that there are programs that allow gifted down payments.
Consider Home Buyers Plan (HBP). Look into the rules thoroughly. Your banker or real estate agent may need to be aware of all the loopholes.
While many retirement plans limit dipping into first-time home buyers, the definition of a first-time buyer may be someone who hasn’t owned a home in the past five years.
Start as early as you can when saving for a down payment. Banks need at least 90 days of bank account statements for the entire down payment amount.
You may not be as cash poor as you think you are!
It can be easy for home buyers to think that the bank is their only real option when it comes to taking out a mortgage.
It could be a costly home buyer mistake which should be avoided at any cost.
Shopping around for the best mortgage product is the key.
Ask more about terms and conditions associated with mortgage rates including repayment options, such as bi-monthly and biweekly payments, types of interest rates (fix mortgage rate, Variable rate) , associated pre-payment penalties, and much more.
If you are in a house hunting mode and are a first time homebuyer it is a good idea to speak to an independent mortgage broker or agent because they have access to many mortgage lenders whose interest rates and pre-payment penalties are lower. Connect with us today. We can help you make a more intelligent decision about your mortgage. We got lender who lend based on your credit scores.
Don’t take a no from the bank as your final answer – explore your options!
Don’t take “NO” from the bank as your final answer!
Buying real estate to live in is one of the most significant investments you’ll make, so it’s critical to arm yourself with as much specific information as possible.
Knowing specific data (CREA realestate stats) about home sales in an area from the past 30-60 days and within a few hundred meters of your target property can help you accurately assess market value and determine if you’re making a sound investment.
A dependable real estate agent who can provide detailed data can be invaluable for home buyers.
Don’t let yourself fall victim to home buyer mistakes by getting taken in by overly inflated prices without doing proper research.
Have the confidence that comes from understanding your local market, and make sure to avoid homebuyers’ remorse down the line!
Be familiar with the real estate market so you don’t PAY TOO MUCH!
Not hiring a buyer’s real estate agent is another typical home buyer mistake many first-time home buyers commit.
Having a competent realtor on your side makes the home-purchasing process easier and faster.
It saves you both time and money in the long run.
They can guide you every step of the way. They understand where to search for homes that fit, are familiar with local market trends, can arrange home viewings, inspect homes to make sure they aren’t flawed, examine their condition for insurance problems, and recommend other professionals that can help with specific areas of home buying.
On the other hand, a seller’s agent has a legal obligation to look out for the seller’s best interest – not yours.
Do not leave yourself exposed. Hire an experienced real estate professional to look out for your best interest.
Are you still waiting for one? We can help.
Another common home buyer mistake is failing to consult a real estate lawyer before signing an agreement to purchase a house.
The offer-to-purchase agreement is legally binding.
While your real estate agent gets paid after you purchase a home, they are neither trained nor allowed to provide legal advice.
When a buyer presents a purchase agreement to the seller with no conditions, chances are they will not benefit from any clauses or contingencies that could have otherwise been beneficial if reviewed by an experienced real estate lawyer.
Legal advice is essential when making the final decision, as it allows the potential home buyer to properly weigh legal options and best understand their rights and obligations.
Interviewing several lawyers before making a final selection will equip home buyers with unbiased reviews and can lead to smarter decisions regarding purchasing a home.
Furthermore, allowing lawyers to review the home purchase agreement helps prevent home buyers from being taken advantage of in the deal.
Home buyers can move forward confidently by having a good real estate lawyer right from the beginning.
Thankfully these mistakes are easily avoidable with an experienced home inspector and proper due diligence.
Before you sign that agreement, get a home inspection report from a certified home inspector – doing so will help you make an informed decision about the property before committing to this property.
Ask your home inspector for recommendations, how many home inspections they have conducted in the past and what kind of report will be provided to you – including an estimated timeline for completion.
It would be best if you were extra careful when your real estate agent arranges the property inspector.
Ask for thermal scanning, as this is a great tool to know the state of insulation behind the walls.
Also, it’s best to be present during the home inspection process; if this isn’t doable, look for another home inspector. Your home inspector will thoroughly check all aspects of the property, like water damage, mould-mildew problems, and electrical panel, to inform you of what needs to be repaired or replaced before completing your purchase.
A detailed inspection report becomes a valuable tool further to negotiate the price and terms of your purchase.
Don’t leave this critical step up to chance! It is money well spent, I promise.
Have the house professionally inspected
It can be exciting to be a homeowner; however, home buyers must check the surrounding area and find out about the restrictions, conditions and covenants governing their chosen subdivision.
Knowing what additions or changes are not allowed is the key to understanding home-buying guidelines within your new neighbourhood.
Additionally, if you are looking at condominiums or a stratum building, ensure that you know the bylaws and any rules you may find uncomfortable, such as visits by extended family members or pets not being allowed.
Hiring a Buyer’s realtor to help with this process can make the home buying much less stressful and ensures that home buyers know exactly what they are getting into before waiving all the conditions related to the purchase agreement.
Lastly, thoroughly check local zoning laws to ensure you fully understand your future home environment. Failing to complete your due diligence may put the home buyer into a bind that may cost them lots of money in the near future.
Check The Zoning & Bylaws.
If you are a first time home buyer looking for an independent mortgage broker in the Mississauga and GTA area connect with us today.