6 Common Mistakes Home Buyers Make
Mistake #1: Not Getting Pre-Qualified for a Mortgage
Before looking for your next home take the time to get pre-qualified by the bank or mortgage broker you choose. This will save you looking for places outside of your price range or even worse, putting an offer on a place and having it fall through because you didn't qualify for financing. Not only does pre-qualifying gives you peace of mind, but it also gives me a negotiating edge by being able to alleviate the sellers concern over financing. The latter is especially important should a competing offer surface.
Mistake #2: Not Shopping for Mortgage Terms
Rates are negotiable! Banks will sharpen their pencils to get your business especially if you have a good credit rating and bring other business to them e.g. RRSP’s, general account, savings etc. Posted rates should be viewed as a starting point. You need to know what the best rate is and this is usually done by getting competitive quotes. Also, ask whether the bank will cover appraisal fees, and about buy-out fees, penalties, payment options, portability etc. The time spent can save you thousands of dollars over the life of the mortgage.
Mistake #3: Not Getting Professional Inspections
Nobody wants to purchase a home only to find out later there are defects, latent or otherwise. Ensure you obtain inspections where needed e.g. home inspection, structural engineer, insect, radon etc. If the inspection identifies deficiencies you may be able to negotiate the purchase price to cover required repairs or make your satisfaction of the inspection subject to the homeowner remedying the problem.I would be happy to advise you on inspections you should consider.
Mistake #4: Not Using a Professional Real Estate Agent
I'm there to make sure you make a purchase with the least amount of problems. I'll making sure that the price you pay is market value and I can offer expert advice on what to look for, conditions to include, and negotiate on your behalf.
Mistake #5: Buying First, Before Selling
Not only will selling your place first give you a better understanding of your cash flow for purchasing a new home, but it will also help you put together an offer without having to be subject to the sale of your current place. The fewer conditions on an offer makes it much more attractive to a seller. Sellers will often ask for more money to take a “subject to” offer. The other advantage is if you find a terrific house, chances are others will also find it attractive and you stand to lose it if you can’t make an unconditional offer.
Mistake #6: Not Knowing the Full Cost of Home Buying
Know all the costs associated with your purchase. Consider the following costs: legal fees, transfer tax, property taxes, new home landscaping, fencing, appliances, window coverings, etc. Having unexpected costs pop up at the end of a transaction can really put a damper on the deal and could put you in a bit of a pinch financially.