Home buyers can be at risk of making costly mistakes when preparing to buy the biggest purchase of their lives. By letting emotions cloud judgement, they can sometimes let a great property pass them by, or even worse, they can overpay for a home they decide to purchase.
If you are looking to buy a home, here are 6 common mistakes that buyers are making, and some tips for how to avoid them:
A buyer with a pre-approved mortgage will have a negotiating advantage.
1. Not getting pre-qualified for a mortgage.
Avoid wasting time shopping for homes in the wrong price range by getting pre-qualified with your lender. Getting pre-qualified will give you peace of mind when making an offer to purchase and will give your agent a negotiating edge by assuring the sellers that financing will not be an issue should they accept your offer.
2. Not looking at the resale value of a home.
Buyers often believe that they are purchasing their last house! Statistics show however, that we move 4 or 5 times in a lifetime. Therefore, buying a home that is unique and which may not appeal to a wider range of buyers can be a problem when trying to sell in the future. This is an important point to discuss with your Realtor who will be able to point out the positive and negative aspects of properties that you may not consider if you’ve fallen in love already.
3. Not conducting your own inspections and investigations.
Some buyers don’t see the need for a home inspection – especially if they are buying a new, or extensively renovated home. They don’t think an inspector will find anything that needs repairs, and the inspection can be costly at around $500. Saving that amount may seem like a good idea, but it may also cost the buyer more in the future. For instance, if the attic of a newly renovated home was poorly insulated, the buyer may not have the expertise to detect this defect. When winter hits and the hydro bills start coming in, the buyer will either pay for the extra fuel to heat the home, or will need to conduct an investigation – and subsequently to remedy – this problem. It would be much easier to discover this defect before purchasing the home so that the buyer could either negotiate the purchase price to cover the repairs, or make a satisfactory inspection subject to the current home owner fixing the problem.
4. Not knowing all the costs associated with buying a home.
Buyers should be aware of the costs that come with a real estate purchase transaction so they can budget accordingly. Nothing will dampen the excitement of taking possession of your new home than getting unexpected bills. See Real Estate Transaction Closing Costs for a detailed list of items to budget for.
5. Not selling current home before trying to buy.
Selling your current home will provide you with a definite budget for your new purchase. In addition, buyers who have sold their home are more likely to make a competitive offer on the home they’d like to buy. Sellers will appreciate an offer without the condition of another home selling which can work in your favour if other interested buyers cannot offer the same.
A Realtor familiar with the local market will help you make smart buying decisions.
6. Not using a professional Realtor who knows the local market.
Some buyers believe that working without an agent will allow them to negotiate a lower price on a house. This is a misconception that can be very costly when buying real estate. Realtors are able to access information on the actual sale price of comparable properties in the neighbourhood. This is crucial information that will help establish a negotiation strategy when making an offer to purchase. Aside from price, a professional Realtor will also provide guidance regarding what conditions to include in the offer to best protect your interests, what to look for in a property based on your needs and give you access to other reputable professionals in their network that can help with the transaction (inspectors, real estate lawyers, contractors, etc.) After all, a Realtor works for you.
Buyers shouldn’t be afraid of getting emotional when looking to buy a home. After all, this is the biggest, and likely the most important purchase anyone can make! But having someone who is experienced and qualified to guide you through the process is important if you want to avoid making a bad home purchase.
If you are looking to buy a home, let me help. I can offer my expertise to ensure the process is smooth and stress free for you and your family. Contact me at steve@stevewalsh.ca.
