Tips on buying a home

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 house. 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. Of course, with so many details involved, slip-ups are inevitable. But be careful: learning from your mistakes may prove costly. Use the following list of pitfalls as a guide to help you avoid the most common mistakes.

Searching for houses without getting pre-approved by a lender:

Do not mistake pre-approval by a lender with pre-qualification. Pre-qualification, the first step toward being pre-approved, will point you in the right direction, giving you an idea of the price range of houses you can comfortably afford. Pre-approval, however, means you become a cash buyer, making negotiations with the seller much easier.

Failing to familiarize yourself with the neighbourhood before buying:

Check out the neighbourhood you’re considering, and speak to the neighbours and local merchants. Are there schools, churches, parks, or grocery stores within reach? Consider visiting schools and day cares in the area if you have children. Keep in mind resale marketability. Ask yourself if others would want to buy this house down the road? Consider your own needs but also the appeal for future buyers.

Allowing “first impressions” to overly influence your decision:

The first impression of a home is 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. The best way to do this is to see as many homes as you can in your price range and compare apples to apples. Don’t let the current owners’ style sway your judgment. Look beyond the outdated décor or clutter. But don’t be fooled by quick make over jobs either. If you have a solid foundation and the desired location and space cosmetics can be changed.

Making an offer based on the asking price, not the market value:

Ask your Realtor for a current Comparative Market Analysis. 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 a Comparative Market Analysis before deciding upon an asking price, so make sure you have all the same information at your fingertips.

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 on the property itself. A home inspection performed by a competent company will help you enter the negotiation process with eyes wide open, offering you 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. Your Realtor can suggest reputable home inspection companies for you to consider and will ensure the appropriate clause is entered into your contract.

Not knowing and understanding your rights and obligations in the Offer to Purchase:

Make it a priority to know your rights and obligations. Ask questions about chattels, a survey and zoning certificate, the possibility of changing possession dates. No question is trivial. You are the buyer so it is your responsibility to be educated. Lack of understanding about your obligations may, at the very least, cause friction between yourself and the people with whom you are about to enter the contract. Assumptions, poorly written, missing clauses, or a lack of awareness of how the clauses apply to the purchase, could contribute to increased legal costs and void a contract. Your Realtor and lawyer are experienced in these contracts make sure you are as well informed.

Not using a Real Estate lawyer:

We all know professionals in our warm circle of influence. But do you that lawyers are very specific in their work? Make sure you use a real estate lawyer to review your offer and close your deal. Each person you come in contact with this transaction plays an important role including your lawyer. Ask for referrals of real estate lawyers to ensure a smooth closing.

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. Employ the knowledge and skills of an experienced realtor. S/he will know what strategies of negotiation will prove most effective for your particular situation.