Top 10 Buyer Mistakes
If you’re thinking of buying a home, read the Top 10 Buyers Mistakes before you make a move!
1. Not having your finances in order.
Before you even sit down with a mortgage advisor, get your credit score so you can understand and rectify any issues (it can take 6+ months to improve your FICO score). This will allow you to look better in the eyes of lenders and therefore secure better rates. You can also ensure you have the information needed to apply for a mortgage – 3 years past history of T4’s, investments, recent pay statements etc.
2. Not getting to know the market before you buy.
We always recommend that you start getting to know what is coming out on the market and what homes are selling for 2-3 months before you want to buy. This will allow you to see what your budget will buy and set your expectations before you walk into multiple offers. It will also give you greater confidence that what you are looking at is what you want compared to what you’ve seen come to pass.
3. Overpaying for a home in multiple offers.
We always ask our clients to take the time to have a very real conversation about the value of the home (which we educate them on with current a comparative market analysis) and what their comfort level is in relation to that value BEFORE they walk into a multiple offer. This ensures a benchmark so you know your walk-away point rather than getting caught up in the emotion and competition of the night. Someone else may win the bid but they may have also grossly overpaid. Don’t be that guy.
4. Assuming what you are approved for is what you can afford.
Just because the bank approves you to spend a certain amount, doesn’t mean that is what you can realistically afford. When we first got into the home market we were shocked by what the banks were willing to lend us but they probably weren’t taking into account that one of us would be on maternity leave, staring a business, saving up for a vacation or planning on having any kind of a life at all!
5. Forgetting about added costs.
Most people project their monthly housing expenses based on their mortgage payment and utilities but often forget property taxes, home insurance, home maintenance, renovations, furnishings and any vendor balance owed (i.e. when the seller has prepaid the property taxes and you owe them the pro-rated amount at closing!). Make sure you evaluate all of the potential costs of owning a new home or for upsizing to a bigger one.
6. Letting your emotions take over.
This is what your real estate agent is for. So many times we’ve worked through a firm list of must-haves for clients when they buy only to have that all go out the window when they see a cool exposed brick wall or swank roof top deck. We’re there to help remind them of their goals and what will work for the long term. As we say, contrary to popular belief, we don’t want you to keep moving.
7. Not thinking through your goals short and long term.
Speaking of goals, it’s important that you know what is important to you now, and tomorrow. You may not be having kids right away but at some point school districts may matter to you if you don’t want to move. You also need to consider what your show-stoppers and must-haves are. What are you willing to sacrifice to get into a certain neighbourhood? What won’t you live without?
8. Not being on the same page as your partner.
You also need to make sure that you and your partner are on the same page. There have been many a car ride viewing homes where we’ve had to pull over, grab a coffee and do a bit of counselling to get a couple to agree on what they want in a home and where they want to live. So many times they assume the other person agrees with their plan only to find out that wasn’t the case!
9. Skipping the home inspection.
It can be tough to enter a multiple offer situation with conditions but it’s just as important to know you’re protected. When we’re listing a home we actually conduct a home inspection before we even list it so potential buyers can review it before they put an offer in and therefore reduce the uncertainty of the offers coming to our seller. But for buyers, what you can do? First, if a home inspection has been done prior to list we will review and often meet with the inspector to go through it. Second, if time allows, we will book our buyer’s own home inspection prior to offer night.
10. Not expecting more from your agent.
Your agent is not just there to send listings, show homes and write up paperwork. They are there to help you work through your goals, wants and needs, get you into homes as soon as they are listed and if possible, before they even come on the market. They should be educating you on the market and specific comparable data for homes you are considering. They should be able to share the intricacies of the area (is there a big condo going up right behind the house you’re about to buy?), know what the street is like that you are looking at (lots of families with kids the same age?) and help manage the emotions of the process. They should also be there after the paperwork is signed, helping ensure everything is going smoothly for closing and providing resources for your new home.
This may be one of the biggest decision of your life. Set your standards high and expect much more.
Thinking of buying this year?
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