8 Mistakes to Avoid When Buying a Home

Posted: Tuesday May 8, 2018

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.

1. Can I search 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.

2. Should I allow "first impressions" to influence my decision?

The first impression of a home is referenced as 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. Don't let the current owners' style or lifestyle sway your judgment. Beneath the poor décor or messy rooms, these homes may suit your needs and offer you a structurally sound base with which to work. Likewise, don't jump at a home simply because the walls are painted your favourite colour! Make sure you thoroughly the investigate the structure beneath the paint before you come to any serious decisions.

3. Should I get a home inspection before buying a house?

Buying a home is a significant financial decision that's made after spending 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 to consider and will ensure the appropriate clause entered into your contract.

4. Do I know and understand my rights and obligations as listed in the Offer to Purchase?

Make it a priority to know your rights and responsibilities inside and out. A 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. Wrong assumptions, poorly written/ incomprehensible/ missing clauses, or a lack of awareness of how the clauses apply to the purchase, could also contribute to increased costs. These problems may even lead to a void contract. So, take the time to go through the contract with a fine-tooth comb, making use of the resources and knowledge offered by your Realtor and lawyer. With their assistance, ensure you thoroughly understand every component of the contract and can fulfill your contractual obligations.

5. Should I make an offer based on the asking price or 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 house you're looking at under-priced, overpriced, 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.

6. What should I know about the neighbourhood before buying?

Check out the community you're considering, and ask around. What amenities does the area have to offer? Are there schools, churches, parks, or grocery stores within reach? Consider visiting schools in the area if you have children. How will you be affected by a new commute to work? Are there infrastructure projects in development? All of these factors will influence the way you experience your new home, so ensure you're well-acquainted with the surrounding area before purchasing.

7. When should I look into home insurance?

If you wait until the last minute, you'll be rushed to find an insurance policy that's the ideal fit for you. Make sure you give yourself enough time to shop around to get the best deal.

8. What should I know about 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 result in the seller becoming more inflexible, polarizing negotiations. Employ the knowledge and skills of an experienced realtor. They will know what tactics of bargaining will prove most useful for your particular situation.