Common Mistakes To Avoid As A First Time Home Buyer

It can be really exciting to enter the home market as a first time buyer. From open houses, to private showings, to finding the perfect Realtor who makes all the paperwork seem easy. There are lots of government incentives to take advantage of, and so many houses to choose from on the market. Buyers are really having their moment in Ontario Real Estate. The last thing anyone wants amidst all this excitement is to get caught up in the dream of home ownership and make a costly mistake. You want to make sure your educating yourself as much as possible, because educated buyers make great decisions. The following blog will go over some common mistakes buyers tend to make, so you can learn, and avoid these mistakes in your own home buying journey.

1. Not getting Pre Approved for a mortgage BEFORE looking at homes.

   
   

   Some buyers think they can get a feel for the market first and figure out the financials later, but this is a huge mistake. There's nothing worse than thinking you have found the perfect home, only to realize its way out of your budget, and now nothing will compare. Not to mention, all sellers want qualified buyers booking showings. They do not want to spend time preparing for a showing for someone who hasn't even gotten their finances in order and might be wasting everyone's time. (Harsh I know, but true). You want to be taken seriously as a buyer, so get a pre approval done, its very easy, quick, and painless, I promise.

   
   

While your at it, you also want to get the rest of your financial ducks in a row, i.e. your deposit. This way, you can be ready to jump on the perfect house when it appears. If the home is perfect for you, chances are its also the perfect home for someone else, so you don't want to miss out because you didn't have your deposit ready to submit with that offer!

2. Not getting a home inspection.

   
   

   Remember, a home inspections purpose is not to provide ammunition you then use against the seller in a negotiation, it is meant to provide the full picture regarding a homes true condition so that you can make an informed decision about your purchase. The inspection provides you so much information about how to care for your future home, systems maintenance, as well as areas to focus on that may need repairs or updates sooner rather than later. I recommend you not only read this report, but that you attend the inspection as well. What better way to learn about how to properly maintain your new home than from a knowledgeable inspector.

3. Forgetting to budget for closing costs.

   
   

   Land transfer tax, lawyer fees, adjustments on closing... for a full list of fees click the link HERE.

   *Some closing costs are cash on closing and can't be lumped into your mortgage, so its best to know what to anticipate before you make an offer.

   
   

4. Making an emotional decision.

   
   

   Its hard to not get emotional when viewing properties. I would implore you to try as best you can to overlook the staging, remember, its done for a reason, and that reason is to show you an idealized version of the home and all its glory/potential. But your buying the home, not the beautiful sectional, so ignore it, and focus on the flow of the home, the size of the rooms, the condition of the roof and backyard, and most importantly, how this home will serve your family for the years to come. One way to stay focused is to invite a trusted friend or family member (hey Mom and Dad!) to come view the home with you to give an unbiased perspective on things. Always remember when to walk away in a negotiation, even if this house is pulling on your heart strings. I am a big believer in things happening for a reason, so if you lose out on a home, it just means your perfect home is still out there. Don't lose sight of what you really want and need!

   
   

   *Overly emotional buyers will do anything to get the house of their dreams, even if that means overpaying.

   
   

5. Oversharing during a viewing or open house.

   
   

   Remember these words before your next viewing, the seller almost always has some form of security device on the property that records audio or video. When you walk through the home, do not discuss your budget, what you would be willing to pay for the home, or even whether or not you like the home. Keep your motivations a secret! This applies to open houses also. Remember, the agent at the open house already has a client, the seller, and everything you say to the agent will be reported back to their client.

   
   
   
   

6. Not asking about the neighbors.

   
   

   I cant stress this enough, you need to ask this question. A good seller will be honest in their response, and believe me, you definitely want to know about any existing drama , or property boundary issues you may be taking on.

7. Not Viewing the property at various different times of the day/week.

   
   

   Imagine only viewing the property on a Saturday or Sunday, and later finding out the smell from the nearby sewage plant that only smells when the wind is blowing from a specific direction, or time of week. Or maybe the nearby school bells that go off through out the weekday are driving you insane. I recommend doing a few visits (in your vehicle) throughout the week, and make sure you do some evening neighborhood recon also. Remember, you can always change a home, but you can't change the location.

   
   

8. Overlooking the ugly house.

   
   

   Most sellers will swipe away when they see an ugly house on the MLS, but usually these homes are not nearly as bad as they appear. They are just victims of bad marketing. If you see a home in your desired neighborhood, but it looks bad online, what you should see is an opportunity to get into a neighborhood you might otherwise not have been able to afford. Not only that, sometimes you can take advantage of a sellers bad marketing and get the home for less than asking, since many other buyers will ignore this home and not book showings. (Let this be a lesson for when you need to sell you home in the future, photos matter).

9. Not testing all the appliances and mechanics on the day of close.

   
   

   Make sure on closing that you run a load in the dishwasher, throw a load of clothes on, test the furnace and A/C. The offer usually stipulates that appliances/mechanics will be in good working order on the day of closing. However, if you fail to test these things and find that something isn't working, the assumption will be that you broke it. This is the reason many Realtors arrive with a frozen pizza in hand on closing day.

10. Buying a Fixer-Upper as your starter home.

    
    

    Renovations sometimes start small, and then walls get opened up and bam! Your small bathroom reno turns into a full blown nightmare. Budgets can start to change, and the added stress can really take its toll on an unexperienced couple. Make sure you get all the details from an experienced owner or contractor before you buy a home in this condition so you can know what exactly to expect.

11. Not taking advantage of government programs for first-time buyers.

    
    

    From tax credits to land transfer refunds, home buyers plan, FHSA, there are options out there to save you money. Do the reading, it will pay off. Head to my article HERE for full breakdowns of all the first time buyer incentives in Ontario.

    
    

12. Buying before selling if you’re counting on getting the highest price for your home.

    
    

    The buy vs sell first decision is a tough call, there are pros and cons to both choice. Typically, when you sell first, you avoid the risk of having to discount your home to make a quick sale. You are also setting yourself up to be in a financially strong position, so you can negotiate a better purchase price while also knowing your exact budget. However, if a person is worried they might not be able to find the perfect home, it may be a better option to buy first. Not to mention, you would avoid having to think about storage for your belongings, or possibly competing with tons of other buyers if its a hot sellers market.

Remember, there's a lot that goes into buying a home, and working with a knowledgeable Real Estate Agent can help you avoid these mistakes, and more. Feel free to reach out if you need help getting started.