Looking for your first home? And, you want to have a smooth and successful home purchasing experience? Then avoid these common first-time homebuyer mistakes.
1. Thinking you don’t need a real estate agent
You might be able to find a house on your own but there are still many aspects of buying real estate that can confuse a first-time buyer. Rely on your agent to negotiate offers, inspections, financing and other details. The money you save on commission can be quickly lost by a botched offer or overlooked repairs.
2. Getting your heart set on a home before you do your homework
The house that’s love at first sight may not always be what it seems, so keep an open mind. Plus, you may be too quick to go over budget or may overlook a potential pitfall if you jump in too fast.
3. Picking a fixer-upper because the listing price is cheaper
That old classic may have loads of potential, but be extra diligent in the inspection period. What will it really cost to get your home where it needs to be? Negotiating a long condition time frame will give you time to understand what you may be getting into – to get estimates from contractors – in case you need to back out.
4. Committing to more than you can afford
Don’t sacrifice retirement savings or an emergency fund for mortgage payments. You need to stay nimble to life’s changes, and overextending yourself not only leaves you house poor – it could put your investments – including your house – on the line.
5. Going with the first agent who finds you
Don’t get halfway into house hunting before you realize your agent isn’t right for you. The best source: a referral from friends. Ask around and take the time to speak with your potential choices before you commit.
6. Diving into renovations as soon as you buy
Yes, renos may increase the value of your home, but don’t rush. Overextending your credit to get it all done fast doesn’t always pay off. Take time to make a solid plan and the best financial decisions. Living in your home for a while will also help you plan for you. When in doubt, talk to your Realtor about whether your changes will affect market value at all.
7. Choosing a house without researching the neighbourhood
It may be the house of your dreams, but annoying neighbours or a nearby industrial zone can be a rude awakening. Spend time in the area before you make an offer – talk to local business owners and residents to determine the pros and cons of living there.
8. Researching your broker and agent, but not your lawyer
New buyers often put all their energy into learning about mortgage rates and offers, but don’t forget that the final word in any deal comes from your lawyer. As with finding agents, your best source for referrals will be friends and business associates.
9. Fixating on the lowest interest rate
Yes, a reasonable rate is important, but not at the expense of heavy restrictions and penalties. Make a solid long-term plan to pay off your mortgage and then find one that’s flexible enough to accommodate life changes, both planned and unexpected. Talk to us to learn more.
10. Opting out of mortgage insurance
Your home is your largest investment so be sure to protect it for you and anyone in the home that is relying on your income to keep a stable roof over their head.