Reduce risk
Use these tips to avoid the top 10 buyers mistakes made by home shoppers. Questions? Contact Constantin and Mariana Popa for more information.
Get pre-approved
This is the most common of the top 10 buyer mistakes: Talk to a mortgage broker before you begin looking for a house. It lets everyone know you are serious about buying a home. By shopping in your price range, and knowing how much you can afford, you reduce the risk of disappointment later. A pre-approval will provide you with a letter of commitment that is a legally binding contract stating that a lender will advance funds up to a certain amount. “Pre-qualified” is only an approval in principal and is not a letter of commitment contract. Buying large ticket items in preparation for your new home will affect your credit rating. Wait until after you move in before shopping for a new car or furniture.
Think long term
Buying a house is the single largest investment you will ever make. Be critical about features and location. Will you be able to stay there 10 years or longer? Most people live in their homes for at least seven years. Moving sooner can be expensive depending on the local market.
Talk to the neighbours
Walk around the block and see how other people live. Introduce yourself to the neighours and ask what it’s like to live in the neighbourhood. Talking with the people who live on the street is the only way to know for sure. If it’s a condo, stand in the lobby for a little while and ask the people coming and going what they think. Always interview the condo management company prior to making an offer.
Research alternatives
If you have the skills to do some renovations or cosmetic work, then you might consider a DIY project. Lenders will often advance funds for some fix-ups and qualify the purchase on the finished home. If you’re comfortable with a degree of uncertainty in the closing process, perhaps a foreclosure would work but there’s always the risk that someone will outbid you when the deal is presented to the court.
Have a firm budget
It’s easy to overspend especially when everyone seems to be encouraging you to buy a bigger place or with features that are expensive to maintain, like a pool. An “extra $2 a day” may require sacrificing entertainment or other lifestyle choices. It’s better to buy something a little under budget than to borrow the maximum.
Be objective
A certain amount of pragmatism is required when house hunting. It’s easy to fall for the house that reminds you of Auntie’s or be swayed by the smell of baking bread. Try to be practical. Ask your agent to help you stay with the plan. Wel understand – we have helped lots of people navigate the emotional journey of finding their dream homes.
Get a home inspection
Never assume that because the home looks tidy and organized that all is well. All homes should be professionally inspected. Even condos and new homes may have issues with common areas or fit-and-finish that you need to be aware of. If you feel pressured to waive your right to inspect, it’s probably not the right home for you.
Read the fine print
Sometimes there are mistakes in the paperwork like chattels or the lender’s interest rate. Once you sign something, even if there is a mistake, you’re legally obligated to comply with the terms. Always read everything before you sign.
Never waive your rights
This is the most important of the top 10 buyer mistakes: Never sign an offer that doesn’t allow you to back out of the deal because you cannot get financing or if the home inspection turns up something expensive. We will add clauses to the offer that will give you the option to cancel if everything isn’t to your liking. It’s in your best interests to have as many escape clauses as necessary to protect you from the realities of trading real property.
Here is an interesting article on mistakes buyers make at Moneysense.ca
