1. Not having proper Financing- If you are thinking of buying a house, whether you have previously bought or are a first-time buyer, you need to be sure you can afford it. Getting a pre-approved mortgage and credit check before even looking at available homes will relieve headaches throughout the buying process because you will have confidence knowing what is in your price range. Buying your dream home and finding out after the fact you can’t afford it can be heartbreaking in more ways than one!
2. Making an offer without Conditions- financing, home inspections & water testing are some of the conditions you may need when putting in an offer on a house. Conditions are essentially your right to “bail” on the offer if these needs are not met. Be sure to talk to your realtor about what conditions should possibly be included to ensure you don’t run into problems after you move in. Keep in mind that you may encounter conditions at the sellers request as well.
3. Not considering Closing Costs- Unfortunately, there and many additional costs associated with buying a house. You need to consider the lawyers fees, adjustments, insurance, taxes…etc. Many First-time buyers tend to overlook these costs, with their focus on the getting the down payment fulfilled, until the day of closing of course, when this bill magically appears in their hand! Taking a look at property tax, Land Transfer Tax, inspection fees, in your area will all help you estimate what the closing costs will be.
4. Not Reading the fine print- Be sure your realtor goes through EVERY document you sign, and you understand the clauses and details involved. You don’t want any surprises when making a purchase of this calibre so sit down with your realtor and discuss what you are signing before pen meets paper.
5. Falling in love- So you found the home that checks off all or most of the items on your wish lists and it a must have! Slow Down! When in love with a home, people have a tendency to over pay, or find problems down the road. Do your research. Look into how long its been on the market, or if it’s a house that has been bought and sold frequently in the past. Prove your love!
6. Accepting Oral Agreements- Have you ever heard someone say “Oh I Forgot”? It’s not usually the best thing to hear….its even worse when it comes to the purchase/sale of a house. Oral Agreements have no legal affect on anything if something goes wrong. How can you justify a conversation that took place in court? You got it, you can’t! Putting everything in writing will ensure that the job will be done and if not you have proof that it should have.
7. Not Doing Your Research- When you feel you have found what you’re looking for, its time to start analyzing it. Study the neighbourhood, no matter where you are. See if future developments are in the works, what the neighbourhoods around you are like, crime rates. Study the home itself, if it’s a fixer upper, what are the building codes in the area, what can be saved/removed and for how much. Is the economy rising or depleting, what kind of job opportunities are available. The more you know before you buy, the better bang for your buck you will get!
8. Not having Title Insurance- Title insurance will cover fees when the home owner is faced with such things as fraud, forgery, encroachment & municipal issues. You never know when something could happen. Knowing you’re covered if that time does come helps relieve some of the stress that comes with it. Title Insurance is a one time fee that is usually incorporated with Closing Costs.
9. Thinking Short Term- It is always a good idea to consider the re-sale value of a house you’re interested in. Think about how the local market is and will the house sell for less or more 10, 15, 20 years down the road. The time to sell may even come earlier than that if you have job or lifestyle changes.
10. Failing to find a good Realtor- Looking back at the previous 9 Mistakes, all relate back to not having the right guidance, especially for first-time buyers. A good Realtor should: ask for a statement from the bank confirming finances and affordability in order to search for a homes in the appropriate price range, discuss with you what conditions they feel necessary & ask what concerns you have when writing up an offer, give you fair notice of what closing costs are and what could be included, go over all documents involved and detail what is not always clear in contracts, let you know of any problems with the house they are aware of and caution you not to take drastic chances, have amendments completed right away when discussing factors outside contracts to ensure everything is in writing and having the research done for you! A good Realtor should eliminate Mistakes.