When you’re new at something it’s only natural to make a few mistakes. Unfortunately in today’s highly competitive real estate market a misstep can cost tens of thousands of dollars (sometimes even more). Here are eight common mistakes that first time home buyers make that you’ll want to avoid.
1) Not Knowing Your Real Budget
What you can get approved for and what you can live on comfortably (meaning, can you afford to order pizza on Saturday night?) can be two drastically different things. Take a good look at your budget and have a little wiggle room for an emergency fund. When you push your budget too close to the line you’ll not only become house poor, but unexpected expenses or loss of income can become an intense source of unnecessary stress. A mortgage broker can help you look at additional regular expenses (like insurance, upkeep and taxes) to calculate what different loans will look like in your budget.
2) Not Getting A Real Mortgage Pre-Approval
Filling out a loan calculator online is not the same as getting a pre-approved loan. People who decide to wait to seek mortgage qualification may find a few surprises, like a mistake on their credit report that costs them securing the mortgage they need. This can cost you money in terms of your offer on a home that you’re never going to get to live in, so get your pre-approval before you find your dream home!
3) Champagne Taste Beer Budget
Sometimes a turnkey home isn’t in the budget. When home seekers don’t see what a coat or two of paint, some removed wallpaper, and new fixtures can do to transform a place they’re missing out on what could potentially be their perfect home! Get creative and learn to recognize what “good bones” are.
Home hunting can be exhausting and disheartening, particularly when you’re outbid on offer after offer. Sometimes people will compromise on important “must haves” on their list when they shouldn’t. If you hate taking elevators, don’t buy a traditional condo. If you know you’re planning a big family, don’t purchase the two bedroom bungalow with no room to grow.
5) Skipping the Home Inspection
Would you buy a car without taking it out for a test drive, or having a trusted mechanic look under the hood? Likely (and hopefully) not. The same goes for making an offer without a pending inspection condition. A house inspection can reveal deal breakers that might change your mind about your purchase. Make sure you know what expenses you’re walking into this year, next year, and even five years down the road. The inspector may find a deal breaker that saves you thousands of dollars and a lot of headaches.
6) Not Hiring An Agent
Hire an expert you trust to have your best interest at heart, real estate agents are bound by ethical codes to help their clients, period. It will be well worth the expense. To get tips on hiring an agent that is right for you click here.
7) Using Your Heart & Not Your Head
Take a good look at what living at a specific property will look like. Sure the house is great, but is your commute doubled? Make sure you take a long objective look at what this purchase means both financially and logistically before taking the leap!
8) Not Knowing the Neighbourhood
Talk to potential neighbours, find out what they like and don’t like about the area. Test out your route to work, check out the local schools, and crime rates. Visit the area at different times of day to make sure you feel safe. Your home is supposed to be your castle, don’t build it on a landmine.