10 Deadly Mistakes Buyers Make & How to Avoid them
Buying a new home is one of the most significant decisions of your life. Be properly educated and make all the right moves to ensure your home is both a comfortable place to live and a great investment for the future. Here is a list of the 10 common mistakes to avoid:
01. Failing to use a trusted adviser
A home is the greatest asset of your life, so you need to ensure you have done the proper homework. It is critical that you work with a professional such as a trusted builder, real estate representative or a lawyer. Make sure they are full-time, and that they know exactly what you’re looking for, in your favourite neighbourhood – not their’s. You want to work with someone who gives you a hassle-free experience.
02. Wasting time by looking at homes you can’t afford
Most first-time buyers don’t know what they can afford. It is critical that you know both your credit rating and also how much of a mortgage you qualify for before you begin shopping for a home. Get a full mortgage pre-approval from your bank or broker, which is a commitment from the lender that states the purchase price and your interest rate – guaranteed for a specific amount of time, usually 90 to 120 days. When buying a brand new build, you will need a capped rate up to 18 months, to accommodate the construction period. With this approval in hand, you can then concentrate on looking at condos you know you qualify for.
03. Buying the wrong home
The first thing prospective buyers should do is to make a list of priorities and outline the “must-haves” and your “wish list.” Determine the desired housing style, number of bedrooms, bathrooms, neighbourhood, parking and proximity to work or public transportation. There are so many choices, so be clear and concise, and stick
to your budget.
04. Trying to save money by not hiring a professional home inspector
A home inspection can help distinguish a home that is a money pit from one that is a gem. Even new homes need to be inspected. Professional inspectors will check everything from the foundation to the roof shingles and everything in between. The process often results in you having your new-home builder make necessary repairs.
05. Not revisiting your target neighbourhood a few times
It is critical that you view the area at different times of the day and at night. You want to ensure you’ve made the right decision on your neighbourhood of choice – and potentially your new neighbours.
06. Giving in to fear
Yes, buying a home is a scary thing and you may not feel certain you’ve found the right place. Should you buy now? Will prices fall? Will you receive any incentives? Should you keep looking? Remember, when you’re renting you are making someone else rich and not building equity in your own home. When you become a homeowner, you have a fixed asset and you’re on your way to financial freedom.
07. Not being prepared for closing costs
The down payment is one thing, but there are other closing costs such as lawyer fees, land transfer taxes, utilities, insurance and others – so be prepared. You may also be eligible for government programs such as the Home Buyers’ Tax Credit, so do your research and know what your total costs will be.
08. Not understanding your mortgage
This is a complex and often-intimidating topic, but what you learn (or don’t learn!) about mortgages could save or cost you thousands of dollars. Key factors are your interest rate and amortization, but also find out what your payment privileges are, whether the mortgage is portable, your down payment requirement, insurance needs, and if the mortgage is open, closed, variable or fixed. There are many factors, so make sure you understand them.
09. Failing to understand the differences between buying new and resale
Resale and new homes each have their own pros and cons. Make a list and compare them. A new home offers choices in style, finishes and the suite’s location in the building – and everything is new. But you also may face construction delays, which could impact your finances or current living arrangements. With resale, what you see is what you get. Figure out which scenario is best for you.
10. Being ill-prepared for moving day
It is important to establish a list of priorities and ensure you have contacted the utility companies, secured proper insurance, booked movers, rerouted your mail and finalized all financing. If you do all your homework and you’re well prepared, moving day can be the start of one of the greatest experiences of your life.
Vijay Gandhi is an Re/max Real Estate Sales Rep. & independent mortgage planner- industry insider & CENTUM Agent. If you are purchasing, refinancing or renewing your mortgage, contact Vijay or apply for a Mortgage Check-up to obtain the best available rates and terms.
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