Common Home Buying Mistakes
Buying a home is one of the biggest financial decisions you’ll ever make — one that’s exciting, yet full of potential pitfalls. Knowing what to watch for can save you time, stress, and money.
You’ve been saving for a while, 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.
Not Getting Pre-Approved
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.
“First Impression” Decision Making
The first impression of a home has been cited 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 bad décor or messy rooms, these homes may actually 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.
No Home Inspection
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 significantly in both the short and long-run.
Not Reading the “Fine Print”
Make it a priority to read the contract inside and out. A lack of understanding about your rights and 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 Real Estate Agent and Lawyer. With their assistance, ensure you thoroughly understand every component of the contract, and are able to fulfill your contractual obligations.
Making Offers Based On The Asking Price And Not The Market Value
Get 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.
Getting To Know Your New Neighbourhood
Check out the neighbourhood you’re considering, and ask around. What amenities does the area have to offer? Are there appropriate schools, churches, parks, grocery stores and other amenities nearby? 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? Talk to the neighbours. 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.
“Last Minute” Home Insurance Shopping
Don’t wait to find a suitable insurance policy. Give yourself enough time to shop around and compare in order to get the best deal.
Poor Negotiation Strategies
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.
Avoiding these common mistakes can make your home-buying experience a whole lot smoother and more rewarding. With the right preparation and guidance, you can confidently navigate the process and secure the home that’s right for you.
If you don’t already have a Realtor®, give me a call. I’m here to help you every step of the way – from finding the perfect property to negotiating the best deal. Let’s make your dream home a reality.