5 Mistakes Home Buyers Make And How To Avoid Them
When you’re buying a home or property, whether it’s your first or your fifth, it’s an exciting and rewarding experience. While purchasing your own home or condo may seem like a straightforward process, making mistakes could cost you thousands of unnecessary fees or leave you regretting your decision. So it’s important to be aware of the potential pitfalls before you rush to make an offer on your dream home. To help you navigate one of the biggest purchases you will likely make, we’ve outlined below 5 of the most common mistakes we see homeowners make, and how you can avoid them.
1. Not Knowing Your Budget
Whether you buy a new build or an existing property, additional costs will arise, such as land transfer tax or potential development charges. There are also closing costs and legal fees to take into account. If you’re looking at a condo, the monthly condo fees and maintenance costs are all part of the package. And you won’t want to forget the cost of things like utilities and property taxes which should also be considered. Take the time to do your research and outline all of the costs you could expect when buying a home. Put a number against each to compile the true costs, and then adjust the numbers until they suit your specific financial situation.
2. Skipping The Preapproval Step
Even if you think you have a good idea of your budget, getting preapproved for a mortgage can simplify the entire home-buying process. Just remember, there is a difference between being pre-qualified and pre-approved for a mortgage.
Pre-qualification is when a lender gives you an estimated amount you can borrow based on some general questions about your income, debt, and credit. On the other hand, a pre-approval involves a more detailed examination of your finances to confirm the information.
A pre-approval is a written confirmation specifying the mortgage amount you can afford, along with a fixed interest rate you will be given when the deal is finalized, valid for a specific period (usually 90-120 days). Your Realtor will likely recommend having a pre-approved mortgage before house hunting so that you are only looking at homes in your price range. This ensures you’re looking at homes that are realistic for you to buy which saves time, and you’ll have a clear understanding of your monthly mortgage payments too.
3. Not Working With Real Estate Professionals
Sure, you can “window shop” for a home online or even drop into a few open houses. However not using real estate professionals to help with your home or property purchase can lead to big problems in both the buying and closing process. It could also lead to bigger issues with the property down the road if you’re not careful.
Three professionals you should absolutely have on your side when buying or selling a home are a realtor, a real estate lawyer, and a mortgage broker. You don’t have to go and look for all three – usually your realtor can recommend the other two and vice versa. When you’re looking to hire one of these professionals and you don’t have someone you already know, ask your friends and family or check out reviews online. Making a phone call to ask a few questions before you decide who to work with ensures you’re comfortable with your choice.
Finding the expert guidance you need will make your home-buying experience smoother and easier. Doing your due diligence is not something you should skip.
4. Not Considering the Resale Value
Though it may sound crazy, you should think about the resale value before you buy a home. When you’re buying a vehicle, resale value is always a big consideration, and buying a home should be no different.
Did you know? The average homeowner only stays in a home for four years. Maybe you love the quirky layout or are willing to overlook the busy street traffic but If you buy a home that is not appealing to a general audience it may be hard to sell later on.
Some things that hold their resale value are access to public transportation; nearby parks and other activities; a location close to major roads or highways; and, schools within walking distance. These are typically attractive from an investment standpoint and make your new home desirable in the future.
5. Skipping the Contingency Period
Many homebuyers often overlook the importance of the contingency period in their excitement to get the property they’re dreaming of – but this can lead to serious consequences. The contingency period is a time frame during which you can back out of a purchase if specific conditions are not met. Common issues involve things like home inspection findings, securing financing, or meeting appraised values.
It’s crucial to establish a contingency period before committing to any contracts or payments. Without this safety net, you might end up making a substantial investment without having all the necessary information.
Our Best Advice: Start Your Home Buying Journey With A Plan
Buying a home is probably the largest purchase you will make in your life so it makes sense to have a plan before you go beyond your dreams and start shopping. Take the time to research the professional help you need, organize your tasks and deadlines in advance, review your finances in detail, and work out a budget. Once you have these things in place, you’re ready to start looking for a home or property to fall in love with.
If you’re looking for an experienced real estate lawyer, call Hukam Law. We’ll be happy to walk you through the home-buying process from a legal perspective and what steps you should take to buy the home you want, without added stress. We are up-to-date on local laws and have ample experience when it comes to working through the details of real estate transactions. Give Hukam Law a call 📞 at 705-915-0884 or email us at info@hukamlaw.ca for more information.
***The information provided in this blog is for general informational purposes only and should not be construed as legal advice. If you have legal questions, we strongly advise you to contact us.